Steel Markets

Semiconductor Shortage Spreads into Appliance Sector

Written by Michael Cowden

The semiconductor shortage that has forced North American automakers to temporarily halt production at some assembly plants has spilled into the home appliance industry as well.

The situation is severe enough that the Association of Home Appliance Manufacturers (AHAM), a lobbying group, has warned about potential re-allocations of semiconductors from that sector to others.

washersThere is an “urgent problem” with the global supply of semiconductors, which are “critical” in home appliances, AHAM President and CEO Joseph McGuire wrote in the letter, dated Feb. 24, and addressed to President Joe Biden.

“We need an immediate increase in global production of semiconductors to ensure home appliances continue to be available to meet the increased usage demands exacerbated by the pandemic,” McGuire wrote.

“As your administration weighs options for increasing short-term supplies of semiconductors, we strongly urge that any solution avoid reallocating semiconductors from the home appliance industry,” he added. McGuire’s letter did not specify where chips destined for home appliances might be redirected.

The automotive industry has already been hit hard by the chip shortage, something that has forced General Motors to idle several North American plants through mid-March.

The appliance sector, like the automotive sector, is a steel-intensive industry that has experienced strong demand thanks to consumers spending more on durable goods and less on travel and services following the outbreak of the COVID-19 pandemic.

Case in point: Orders for durable goods surged 3.4% in January, more than triple economists’ forecasts of a 1.0% gain for the month.

A spokesman for Whirlpool, based in Benton Harbor, Mich., and one of the largest home appliance makers in the world, declined to comment on whether the company’s operations had been impacted by the chip shortage. He referred Steel Market Update to AHAM.

By Michael Cowden,

Michael Cowden

Read more from Michael Cowden

Latest in Steel Markets