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Factory suspension

GM Korea to halt 2 main plants next week on automotive chip shortage

By Apr 15, 2021 (Gmt+09:00)

GM Korea to halt 2 main plants next week on automotive chip shortage

The South Korean unit of US auto giant General Motors Co. will halt two of its three plants next week in the latest sign of the worsening global automotive chip shortage.

GM Korea Co. will shut its plants 1 and 2 in Bupyeong, 40 km west of Seoul, from Apr. 19 through 23 as the supply of semiconductors for cars remains uncertain globally, the company said on Thursday.

“We’re in close contact with auto chip suppliers to solve the problem as soon as possible,” said a GM Korea official.

The automaker has already been operating only half its No. 2 Bupyeong plant, which manufactures the Trax compact SUV and the Malibu midsize sedan, since Feb. 8. The No. 1 plant produces the Trailblazer SUV.

The weeklong shutdown, caused by the short supply of chips, including the microcontroller (MCU), will affect some 6,000 units of such cars in lost production.

The Detroit carmaker has three plants in Korea – two in Bupyeong and one in Changwon, where it makes small cars such as the Spark.

GM’s assembly plants in other countries have also been impacted by global chip shortages.

HYUNDAI, KIA ALSO IMPACTED

The factory suspension at GM’s Bupyeong plants comes as other automakers in Korea are also idling part of their facilities for similar reasons.

Hyundai Motor Co., Korea’s top automaker, suspended its Asan plant for two days earlier this week, affecting the production of the Sonata and Grandeur sedans. The company resumed operations at the plant on Wednesday.

Hyundai Motor has also suspended its Ulsan plant, which produces the Kona compact SUV and the IONIQ5, the first model under its standalone electric vehicle sub-brand, since Apr. 7.

GM Korea to halt 2 main plants next week on automotive chip shortage

Hyundai’s sister firm Kia Corp. has adjusted operations at its plant in Hwasung, Gyeonggi Province, by canceling overtime in April.

The disruptions reflect the auto industry’s increasing reliance on the technology provided by semiconductors.

With the rising popularity of smart cars such as autonomous driving vehicles and electric cars, chips are used in a growing number of applications, including driver assistance systems, navigation control, Wi-Fi, Bluetooth, video displays and computerized engines. The latest models have between 200 and 400 chips on average.

Industry officials said the automotive chip shortage in Korea will likely last until the third quarter as the domestic players are heavily dependent on overseas parts suppliers.

Write to Il-Gue Kim at Black0419@hankyung.com

In-Soo Nam edited this article.

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