Sam is a professional trader and the lead stock market news writer at AskTraders. After starting his career in the forex market, Sam now focuses on gold and stocks with a preference for fundamental and macroeconomic analysis.
Electric car manufacturer NIO Inc (NYSE: NIO) will temporarily suspend vehicle production at its JAC-NIO manufacturing plant in Hefei, the company said on Friday.
The suspension will be for five days starting from March 29 and comes due to a semiconductor shortage.
Semiconductors are materials that can conduct electricity and have become vital to the technology we use every day. They are now used in microchips in nearly all electronic devices, with electric vehicles said to use more than 3,000 in one car.
The shortage can be put down to the coronavirus pandemic with the demand for gadgets such as laptops and games consoles increasing (meaning more semiconductors used) and production slowing due to stay at home orders.
However, as some parts of the world have begun to relax restrictions, car sales have increased, and there has been a shortfall in semiconductors.
“The overall supply constraint of semiconductors has impacted the Company’s production volume in March 2021,” said NIO.
The company said it now expects to deliver approximately 19,500 vehicles in the first quarter of 2021, adjusted down from the previous forecast of between 20,000 to 25,000 cars.
NIO shares are trading 5.6%% lower from Thursday’s close at $35.80.
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