In a dizzying 12-hour stretch, Honda said it will halt production at three plants in Japan; BMW cut shifts at factories in Germany and England; and Ford reduced its full-year earnings forecast due to the scarcity of chips it sees extending into next year. Caterpillar later flagged it may be unable to meet demand for machinery used by the construction and mining industries.

Apple chief financial officer Luca Maestri warned a shortage of microchips are leading to supply constraints which could knock up to $US4 billion off revenue during the fiscal third quarter.Credit:James Alcock

“It’s a fight out there and you have to be in daily contact with your suppliers. You need to make sure that you’re important to them,” Nokia chief executive officer Pekka Lundmark said Thursday on Bloomberg Television. “When there is a shortage in the market, it is things like how important you are in the big picture, how strong your relationships are and how you manage expectations.”

Meanwhile, companies that supply chips are reporting surging sales and pledging to invest billions to expand capacity as they struggle to keep up with demand. Qualcomm, the world’s largest smartphone chipmaker, said demand for handsets is surging back as life returns to normal in some markets that had been locked down by the COVID-19 pandemic.

STMicroelectronics, a key chip supplier for carmakers, said profit for its auto and power unit jumped 280 per cent in the first quarter. CEO Jean-Marc Chery credited a surprise rebound in demand as well as the industry’s adoption of new, digital features that require more chips for the latest wave of supply chain constraints.

Samsung, which is both a producer and user of chips, said on Thursday that component shortages will contribute to a slide in revenue and profit this quarter at its mobile division, which produces its marquee Galaxy smartphones.

The shortfall of critically needed semiconductors has forced the entire auto industry to cut output, leaving thin inventories at dealerships just as consumers emerge from COVID-19 lockdowns. In just the past week, Jaguar Land Rover Automotive, Volvo Group and Mitsubishi Motors have joined the list of manufacturers idling factories.

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