On the sidelines of North American Leaders Summit which is being held this week in Mexico City, the Prime Minister of Canada, Justin Trudeau, the President of the United States, Joe Biden, and the President of Mexico, Andrés Manuel López Obrador, reportedly discussed the shortage of semiconductors that continues to wreak havoc in several North American industries.
According to what the media reports Automotive News the White House reportedly made an announcement that the three countries would boost domestic production of semiconductors in 2023.
According to the announcement in question, the three North American leaders are all of the opinion that Canada, the United States and Mexico must reduce their dependence on foreign markets and become self-sufficient in semiconductors.
“Domestic production or preferential access to semiconductors is essential to the economy, but also to the national security of the three countries. It’s been going on for more than a year and it has to stop,” explained Flavio Volpe in an interview with Automotive News. He is the president of the Canadian Automotive Parts Manufacturers Association and he is also in Mexico City this week to participate in the Summit.
He added that geopolitical tensions between the United States and China over Taiwan – one of the key places for semiconductor production – are currently not helping the situation.
However, what we understand from this announcement is that, over the next few weeks, the three countries will set up a semiconductor forum which would aim to stimulate investment in their development and their domestic production, but also to create a road map that would make it possible to better anticipate the needs of various industries, such as the automobile, telecommunications and military activities, in particular.
The ultimate goal would be to build semiconductors that could be used in multiple industries. The Prime Minister of Canada, Justin Trudeau, is expected to make a public announcement to this effect soon.
An enduring crisis
In the immediate term, however, it is clear that parts supply issues continue to negatively impact the auto industry. At the end of 2022, more than 4 million new vehicles were missing worldwide. Several assembly plants have to cut their shifts, which disrupts the employment of a good number of workers.
Taken to the extreme, the situation even forces the complete closure of certain factories, as will be the case of Jeep and its Cherokee assembly line, located in Belvidere, in the State of Illinois. In its press release, Stellantis claimed that the shortage of semiconductors was one of the reasons for the closure of the factory.
It will therefore take some time before we see the fruits of the efforts of the three North American leaders in this regard. At least, we see a desire from the three North American countries to depend less on foreign markets and to repatriate everything here.
