chip Photo:VCG

China's industry watchdog said they will support companies from both home and abroad in ramping up investment to aid continued improvement in semiconductor supply capacity, a reply for the chip shortage across the globe. 

Huang Libin, spokesperson of the Ministry of Industry and Information Technology (MIIT) Tuesday addressed concerns over chip shortage, saying that major global integrated circuit (IC) production lines are now facing a tight capacity as a result of continued robust demand for IC, crucial component of smart manufacturing, especially as the COVID-19 epidemic fuels online communication and boosting demands for chips for data center servers and digital devices.

Automakers around the world are shutting assembly lines due to restricted supply of semiconductors. Reuters reported on Sunday that German car manufacturer Volkswagen is in talks with its main suppliers about possible claims for damages due to a shortage of semiconductors, a company spokesman said Sunday.

US-based automaker Ford has reportedly ordered a month-long production halt at one of its plants in Germany - which employs around 5,000 workers. 

After rebounding from the fallout of the COVID-19 pandemic at a speed beating most carmakers' original expectations, China's auto industry now faces a new dilemma - tightening supplies of semiconductors, which serve a key role as a vehicle's brain from controlling acceleration to steering and braking.

From auto vehicles to mobile phones and blue-tooth earphones, semiconductor shortfall has become the new normal since the second half of last year, and the situation is not likely to improve until the fourth quarter of 2021, industry analysts said.