Jaguar Land Rover to suspend production at UK plants amid computer chip shortage

LaToya Harding
·Contributor
·3-min read
Jaguar Land Rover's assembly plant in Castle Bromwich, Birmingham, England, will be shut down temporarily. Photo: Eddie Keogh/Reuters
Jaguar Land Rover's assembly plant in Castle Bromwich, Birmingham, England, will be shut down temporarily. Photo: Eddie Keogh/Reuters

Jaguar Land Rover (JLR), the UK’s largest car manufacturer, has been plunged into fresh crisis as a shortage of computer chips has caused the company to temporarily shut down production at two of its main plants.

The company, which is owned by India’s Tata Motors (TTM), said it would have a “limited period of non-production” at its plants in Castle Bromwich in the West Midlands and Halewood on Merseyside starting on Monday, according to the Guardian.

It has been reported that the shutdown is scheduled to last at least a week, although JLR will continue to monitor its chip supply before committing to a reopening date.

The chip shortage, which has been steadily worsening since last year, currently spans across the globe and has put pressure on a number of carmakers who are competing directly with tech companies for supply. 

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The computer chips, also known as semiconductors, are used by companies such as Microsoft (MSFT) and Sony (SONY), the makers of the Xbox and PlayStation games consoles, as well as phone manufacturer Samsung (005930.KS).

Last year Apple (AAPL), the world’s biggest buyer of semiconductors, was forced to delay the launch of the much-hyped iPhone 12 by two months due to the shortage.

It has also affected cryptocurrency miners who need computer chips to solve puzzles that earn them Bitcoin (BTC-USD) and other digital assets.

“The automotive industry doesn’t count for much in the semiconductors industry,” a source at another car manufacturer told the Guardian.

The entire global car industry buys about $37bn (£26bn) worth of chips annually.

A JLR spokeswoman said: “Like other automotive manufacturers, we are currently experiencing some COVID-19 supply chain disruption, including the global availability of semiconductors, which is having an impact on our production schedules and our ability to meet global demand for some of our vehicles.

“We are working closely with affected suppliers to resolve the issues and minimise the impact on customer orders wherever possible.”

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Last week, Nissan (7201.T) announced that it would furlough around 10% or 800 employees at its UK plant in Sunderland amid the computer chip shortage.

The Japanese carmaker has asked affected workers to remain on furlough until the chip shortage lets up and production can be increased.

The company also announced it is planning to halt production at some of its factories in Japan from next month.

Other carmakers have made similar moves. Earlier this month$, US car company Ford (F) announced that it will cut car production due to the global chip shortage.

Renault (RNO.PA) and Honda (HMC) also flagged similar plans.

On Friday, the world's largest chipmaker, Taiwan Semiconductor Manufacturing (TSM) dampened any hopes of the issues letting up soon, saying that the shortage could continue into 2022.

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