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Inside China's Scramble to Overcome Microchip Crunch


A Nio ES8 undergoing a battery swap inside a power station at a JAC Motors-Nio plant in Hefei, Anhui province, China.

Automotive chip order times remain long around the world, but brokers are focusing on China, which has become ground zero for a severe shortage that the rest of the industry is gradually moving beyond.

Credit: Reuters

From his small office in Singapore, Kelvin Pang is ready to wager a $23 million payday that the worst of the chip shortage is not over for automakers – at least in China.

Pang has bought 62,000 microcontrollers, chips that help control a range of functions from car engines and transmissions to electric vehicle power systems and charging, which cost the original buyer $23.80 each in Germany.

He's now looking to sell them to auto suppliers in the Chinese tech hub of Shenzhen for $375 apiece. He says he has turned down offers for $100 each, or $6.2 million for the whole bundle, which is small enough to fit in the back seat of a car and is packed for now in a warehouse in Hong Kong.

"The automakers have to eat," Pang told Reuters. "We can afford to wait."

From Automotive News
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