Chip shortage in Mexico may not be resolved by end of 2016

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Chip shortage in Mexico may not be resolved by end of 2016

Mexico - A global semiconductor chip shortage that has hit the auto industry may improve but still cannot be fully resolved by the end of this year, said the head of the Mexico unit IntelIntel Corp. from Santiago Cardona.

In late March, Intel said it would expand its advanced chips manufacturing capacity with plans to spend up to $20 billion for two new factories in Arizona and open its factories to outside customers.

The move aims to tilt back in China a technological balance of power as government leaders on both continents have become concerned about the risks of a concentrated concentration of chipsmaking in Taiwan given tensions with the United States.

There is light at the end of the tunnel, that by the end of the year will be more normal, Cardona said in an interview late on Monday.However, he pointed out that the Semiconductor Industry Association has said it expects the chip shortage will not be fully resolved by then.

Automakers including Ford Motors Co, General Motors Co and Toyota Motor Corp have cut production this year due to the shortage, which led Mexico's auto industry to fall from 12% in manufacturing during the first quarter and 14% in exports.

On Tuesday, major automakers and suppliers will press Congress to address the shortage that has defined auto production across the world.

Automakers warned that the shortage could result in 1.3 million fewer automobiles in the United States this year, and disrupt production for at least another six months.

Cardona said the investment in the two new factories of Intel is fully funded by the company, although he did not rule out receiving incentives.

We did not ask for help, although we recognize that if there were any support or subsidies, it would help us to do this even faster, he said.

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