China to reduce production to 900k units for August due to chip shortage from Malaysia

Earlier this week when we reported the disruption issue at Bosch’s supplier factory in Muar, David Xu, Executive Vice President of Bosch China mentioned that the resulting chip shortage has affected a number of manufacturers, including Nio and Tesla.

Now, without an end in sight, according to preliminary research, the shortage of Bosch components could force Chinese car manufacturers to reduce production to just 900,000 units for August – a massive drop for a country that usually produces around 1.7 million cars a month.

Also Read: Bosch: Disruption in supply from Malaysia affecting Nio and Tesla

Said supplier factory is most likely STMicroelectronics’ plant in the Tanjung Agas Industrial Zone in Muar. The plant currently employs more than 3,000 staff. Out of which, hundreds have been infected by the virus and 19 staff have passed away.

Also Read: After Nio and Tesla, Nissan USA also affected by Bosch’s supply disruption in Malaysia

But that’s not the only affected plant. Malaysia is home to multiple semiconductor factories, including Infineon, Intel, NXP, Texas Instruments, and Renesas. All of these factories have been affected by the Government’s poor management of the ongoing pandemic. Infineon, despite being allowed to resume operations, still faces losses of up to tens of millions of Euros.

The disruption in supply from Malaysia will continue to affect the global automotive industry. China expects the chip shortages to stretch well into 2022. So much so that some experts in China have begun suggesting that companies should move some production lines from Malaysia to China.

Also Read: Failure to contain Covid-19: Chip manufacturers mull exiting Malaysia