The European Union Chamber of Commerce in China said the chip shortage hobbling the country’s auto industry is being caused by semiconductor supply disruptions and surging demand, rather than export restrictions from Europe or the U.S.
The trade group issued the statement after its report last week led Chinese social media to speculate that the shortage was the result of government actions in Europe and the U.S. to curb chip exports to China.
“In reality, market disruptions to semiconductor supplies, coupled with a resurgence in demand in China’s automotive sector, led to a shortage of imported inputs needed for certain key components,” the chamber said in the statement.
“This has nothing to do with government restrictions on exports to China, but rather is due to production limitations caused by the COVID-19 pandemic along with the time needed to expand production capacity to meet rising demand,” it added.
In a report published Jan. 14 under the title, “Decoupling: Severed Ties and Patchwork Globalization,” the European Chamber urged governments to reverse economic decoupling.
The report warned that while the China-U.S. trade war has largely failed to force companies to move production to home countries, the war over technology between the two countries is inflicting material damage on companies and economies at large.
“It can take just one small component, piece of equipment or software that can no longer be sourced to disrupt a company’s entire China operations – with potential ramifications for their global business,” the report said.