Chip dearth puts Nissan plant on pause

DETROIT — Nissan said that its huge factory in Smyrna, Tenn., will close for two weeks starting Monday because of computer chip shortages.

The shutdown is among the longest at any U.S. auto plant of this size since the semiconductor shortage, which has hobbled auto production worldwide, started to hit late last year.

Nissan said Tuesday that it ran short of chips because of a coronavirus outbreak at a chip factory in Malaysia. It expects production to resume Aug. 30.

The 6 million-square-foot Tennessee factory employs 6,700 people and makes six Nissan models, including the Rogue small SUV, the company’s topselling U.S. vehicle.

Analysts say the closure of the large Nissan factory for two weeks is a sign that the semiconductor shortage may not be coming to an end late this year as many auto executives had hoped.

Few U.S. factories have been down for two weeks at a stretch, and they usually are plants that make lower-volume, less-profitable vehicles, such as sedans. Automakers have tried to conserve chips for plants that make their top sellers, largely SUVs and pickups. But pickup plants have been shut down sporadically as well, including three General Motors factories this week.

Guidehouse Research analyst Sam Abuelsamid said Smyrna is a crucial factory for Nissan and its shutdown is a sign that the end of the semiconductor shortage may not be in sight.

“It’s looking like it’s going to stretch at least into the new year,” he said.

With continuing virus outbreaks across the semiconductor supply chain in Asia and other regions, supply problems may last even longer than that, Abuelsamid said.