General Motors (GM) - Get Report shares slipped lower Thursday amid reports that the carmaker is idling another north American plant as a result of the ongoing shortage in global semiconductor supplies.
CNBC said General Motors will temporarily close its facility in Spring Hill, Tennessee later this month, and reiterated the company's estimate that chip shortages will ding its 2021 operating profit by as much as $2 million.
GM's Wentzville, Missouri assembly plant was idled for the two weeks ending on April 5, and its Lansing, Michigan plant has been idled since March 15.
Ford Motor Co (F) - Get Report also cautioned last month that if the shortage extends through the first half of the year, it could take a hit of between $1 billion to $2.5 billion to its adjusted bottom line
The Alliance for Auto Innovation asked President Joe Biden earlier this week to encourage the Commerce Department to direct cash to the sector in order to address the growing semiconductor supply chain issues. Biden has said he wants around $37 billion in U.S. funds to kick-start domestic semiconductor production, and will meet with industry leaders at the White House next week.
GM shares were marked 3.22% lower in early trading Thursday to change hands at $58.82 each. Ford Motor shares were also in the red, falling 2.24% to 12.44 each.
Chip demand surged last year amid the work-from-home shift triggered by the global coronavirus pandemic, lifting worldwide sales by 6.3% to just under $640 billion. That demand looks set to continue well into this year and next, as well, as economies move out from the pandemic's grip and government's stoke investment in green technologies.
The February deep freeze in Texas, however, shuttered factories run by Samsung Electronics, the world's biggest chipmaker, adding to supply-chain issues that were first triggered by a damaging fire at a Japan-based factory run by Asahi Kasei Microdevices.