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March 9, 2021

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China acts to ease chip shortage

China has taken action to ease the tight supply of automobile chips, helping to facilitate vehicle production and promote healthy development of the industry.

The government has released a list of common automotive semiconductors to ensure better management of automobile chip supply.

The Ministry of Industry and Information Technology has issued a handbook to carmakers which consists of 568 products from 59 semiconductor companies, covering 10 categories such as computing, control and power chips.

The guidebook also has over 1,000 items that are in high demand by Chinese automakers and auto parts makers.

Qiao Yueshan, director of MIIT’s electronic information department, said the ministry will actively guide and support the development of the automobile semiconductor sector and support firms to continuously improve supply capacity.

At the same time, Qiao said, MIIT will strengthen the supply chain and demand docking platform, increase production capacity allocation, improve the efficiency of circulation, as well as provide strong support for the stable and healthy development of the industry.

Chen Shihua, deputy secretary general of the China Association of Automobile Manufacturers, said that with various policies and corresponding measures taking effect, the tight supply of automobile chips in the Chinese market will ease in the second quarter.

Chen suggested relevant departments could provide policy support for the design and production of automobile chips, including packaging and testing, to further stabilize the domestic supply chain.

Car manufacturers and chipmakers are also enhancing their collaboration to solve the problem.

In February, Chinese auto giant SAIC Motor said it will join with chip company Horizon Robotics to further expand in the automobile chip sector.

SAIC Motor and Horizon will leverage their strengths to explore cutting-edge technologies in automobiles and in research and development of intelligent and connected vehicles to gain a vantage position in smart vehicle development.

The tight supply of chips after the COVID-19 pandemic has also made domestic auto chip companies aware of the importance of cooperation, speeding up product certification and matching supply and demand.

Whether it is traditional gasoline vehicles or new-energy vehicles, from the central control panel to the body circuit, or the vehicle system, different types and levels of chips are needed.

Since the end of 2020, a tight chip supply situation emerged, putting the global automotive industry on the back foot. Many auto companies such as Volkswagen, Ford, Toyota and Honda therefore encountered chip supply problems.


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