• 3 minutes Will Iron-Air batteries REALLY change things?
  • 7 minutes Natural gas mobility for heavy duty trucks
  • 11 minutes NordStream2
  • 3 hours Evergrande is going Belly Up.
  • 6 hours World’s Biggest Battery In California Overheats, Shuts Down
  • 2 hours U.S. Presidential Elections Status - Electoral Votes
  • 18 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 21 hours Poland Expands LNG Powered Trucking and Fueling Stations
  • 2 days And now, hybrid electric locomotives...
  • 1 day Ozone layer destruction driving global warming
  • 2 days The unexpected loss of output from wind turbines compels UK to turn to an alternative; It's not what you think!
  • 2 days The Painful Death of Coal
  • 1 day The coming Cyber Attack
  • 1 day Is the Republican Party going to perpetuate lies about the 2020 election and attempt to whitewash what happened on January 6th?
  • 1 day 'Get A Loan,' Commerce Chief Tells Unpaid Federal Workers

China’s Heavy-Handed Solution To The Semiconductor Shortage

China is taking a page out of the Keynesian central banking playbook on how to micromanage an entire economy and is now reportedly fining auto chip sales companies for driving up prices. 

And, as central banks will soon find out, we expect China to find out the hard way that you can't print, fine, or tax your way to productivity. 

The price increases are likely a normal result of a shortage of supply in semiconductors, which has plagued auto manufacturers for the better part of the last year.

China's State Administration for Market Regulations said it had fined three local companies a total of 2.5 million yuan, according to a report in Automotive News Europe. 

The companies fined included Shanghai Chengsheng Industrial, Shanghai Cheter, and Shenzhen Yuchang Technologies. 

Further, the regulator said it would continue to "closely monitor" prices and "crackdown on illegal market behavior". You know, like letting supply and demand set prices...

Recall, we noted just days ago how the semi shortage, combined with a Covid outbreak in South Asia, was causing auto manufacturers to slash production targets. 

Toyota is the latest legacy auto manufacturer to come out and announce it is revising its full-year production forecast by about 300,000 units to 9 million units for the year, Bloomberg reported Friday morning.

Related: Record-Breaking Energy Prices Could Soar Even Higher In Europe

The company is citing the Covid outbreaks in Southeast Asia that we have written about extensively, as well as continued shortages resulting from the semiconductor drought. 

Output will be lower by 70,000 units in September and 330,000 units in October, the automaker said. It says its outlook for November, only two months away, is still "unclear" despite "very strong" demand. 

We had cited Malaysian Covid outbreaks as throwing a wrench into the gears of already-stressed auto manufacturing plans for the summer. IHS predicts that 2.1 million units could wind up being lost in the third quarter of 2021 alone. 

Malaysia is home to names like Infineon Technologies AG, NXP Semiconductors NV, and STMicroelectronics NV, all of which have operating plants in the country. With Covid infections soaring locally, plans for lifting lockdowns and re-opening production looked as though they could fall by the wayside last month. Daily infections were up to 20,000 per day in August, up from just 5,000 per day in late June. 

By Zerohedge.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News