Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Semiconductor shortage is affecting Volvo and Turkish carmaker, Tofas. Both the companies, amongst many other global auto manufacturers are forced to shut production temporarily owing to a tight supply of chips amid the COVID-19 pandemic. 


Swedish auto manufacturer Volvo informed the global shortage of semiconductors will bear a significant impact on Volvo Group’s production in Q2 or June quarter. Volvo is set to stop production across all truck manufacturing operations from the beginning of the second quarter for two to four weeks, depending on the production site, stated Volvo’s release. 


The uncertainty around the production of semiconductors is extremely high and the availability of semiconductors and other critical components is low. The shortage of semiconductors will affect Volvo’s cash flow and earnings negatively. The company is focused on minimizing the effects on its vehicles and increasing production when possible. 


Turkish carmaker Tofas Turk Otomobil Fabrikasi will halt production for two weeks until April 5 owing to a shortage of semiconductors. The production unit at Bursa will be facing production halts amid difficulty in the supply of crucial parts to the northwestern part of the country. Tofas had suspended production in April 2020 due to the COVID-19 outbreak. Tofas manufactures passenger cars and commercial vehicles. 


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