Toyota Motor Corp. TM 0.22% , Honda Motor Corp. and Samsung Electronics Co. said supply-chain problems were complicating their businesses, as freak weather, port blockages and the continued impact of Covid-19 combine to disrupt global supply chains.
Toyota and Honda said Wednesday that they would halt production at plants in North America because of a squeeze in crucial supplies, including plastic components, petrochemicals and semiconductors. Honda also blamed port backlogs and severe winter weather that has frozen plants and pipes across the central U.S. for the disruption.
Separately, Samsung, the world’s largest maker of smartphones, said a severe global shortage in chips would hurt its business into the next quarter. The South Korean company also said it might withhold launching a new model of one of its most popular handsets, though it said the move was aimed at keeping it from competing with an existing handset.
The disruptions underscore how a number of forces are coming together to squeeze the world’s supply chains: from the pandemic-driven rise in consumer demand for tech goods to a backlog of imports at clogged California ports and U.S. factory outages caused by severe weather. The timing is particularly concerning for manufacturers because the U.S. and some other economies are beginning to reopen thanks to vaccination campaigns.
“Automotive companies initially had to bear the brunt of these shortages, but now it has spread to pretty much all parts of the consumer-electronics sector,” said Sanjeev Rana, senior analyst at investment bank CLSA in Seoul.
Semiconductors have been in short supply for months after makers of smartphones, PCs, tablets and TVs underestimated expectations during the pandemic, before ramping up orders that caught chip manufacturers unprepared.
Honda said it would halt production at most of its U.S. and Canadian car factories because of supply-chain issues. A Honda plant in Marysville, Ohio.
Photo: Ty Wright/Bloomberg News
Amplifying the shortfall was last month’s severe winter weather across the central U.S. Samsung, also one of the world’s largest chip makers, was forced to idle two chip factories in Austin, Texas, last month. The facilities represent about 28% of Samsung’s total output, according to Citi analysts, and remained shut as of Wednesday. Dutch chip maker NXP Semiconductors NV also scaled back work at two facilities in Austin because of severe weather, though production resumed last week.
Toyota said Wednesday that a shortage of petrochemicals was to blame for a shutdown in output at its factory in Kentucky, where it builds the Camry and Avalon sedans and the hybrid version of its RAV4 sport-utility vehicle. The shortage would also lead to cuts in production of its Tacoma pickup truck built in Mexico. The company didn’t expect to furlough any workers for now.
Honda said it would halt production at most of its U.S. and Canadian car factories next week because of the combination of supply-chain issues, including port backlogs that have delayed the delivery of parts, a lack of chips and severe weather in the U.S. Cold temperatures had caused pipes to burst in some of its factories, hampering their ability to get back up and running, the company said.
The shutdown is set to start at most of Honda’s five auto plants in the U.S. and Canada on March 22 and last a week, the company said, without specifying which plants would halt production. Honda said the duration of the shutdown could change depending on parts supply. Workers will continue to be paid to perform other tasks at the plants, it said.
The troubles are the latest in a string of recent woes for the automotive industry. General Motors Co. , Ford Motor Co. and Nissan Motor Co. have all announced production cuts or temporary plant shutdowns due to the chip shortage. Jammed ports in Los Angeles and Long Beach, Calif., are particularly a problem for Asian car makers that import parts used in their U.S. factories.
Volkswagen AG said it was coping with a large backlog of unbuilt vehicles caused by both chip shortages and the blizzards in Texas. The German auto maker said in response to questions from The Wall Street Journal that it would try to catch up on its vehicle production in the second half of the year.
Meanwhile, chip makers such as Taiwan Semiconductor Manufacturing Corp. have hit production limits, with the company pouring billions of dollars into new capacity to keep up with demand.
Koh Dong-jin, the co-CEO of Samsung, told investors on Wednesday that dealing with the supply-demand imbalance in chips had become a priority for staff. He said that executives were traveling overseas, despite travel restrictions, to discuss the issue with business partners.
Mr. Koh also said the company was considering not launching a new Galaxy Note smartphone this year, one of the company’s most popular products, though he said any such delay would be driven more by concerns that the model would compete with a handset it launched with similar features earlier this year
Demand for many electronics exceeded expectations last year. For instance, PC shipments rose 13% last year, according to research firm IDC, the fastest pace of growth in 10 years. Smartphone shipments fell 5.9%, but IDC and other firms had forecast steeper declines earlier in the year.
“When Covid-19 hit in the first half of last year a lot of these manufactures like everyone else thought the global economy was going to tank,” said CLSA’s Mr. Rana. Instead, “all the spending that was meant for tourism, etc., went into these devices, and companies weren’t ready for this tick up in demand.”
Write to Sean McLain at [email protected]
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