US.

Car giant Ford is now drastically reducing output of its top selling F 1 50 pickup truck, while General Motors says it will suspend work at three North American factories.

The to U.

S carmakers are the latest to react to what has become a global problem.

Germany's Daimler, BMW and Volkswagen, as well as Toyota and many other car manufacturers, said that they will halt production at their factors due to the chip shortage Now.

This comes just as they began recovering from pandemic forced plant shutdowns.

Yes, now these semiconductor chips they power everything from planes to cars to computers and silicon waivers are a key component of the market for these waivers.

Making them has been now by dominated up until now by five companies.

Still, tronic of Germany is one of them and global waivers of Japan as well.

But now those two companies are joining forces.

Global waivers says it's €4.4 billion bid for a controlling stake, and electronics has been successful.

Combined, they will become the world's second biggest silicon wave producer at a time when need for the product has never been higher, Semiconductors are in demand and money is cheap.

Tech heavyweights have taken note and are on a shopping spree with their sights set on Europe's relatively small and affordable companies.

After all, Europe is a huge market that's set to grow rapidly.

That's why two companies changed ownership this week.

German microchip maker Dialogue now has Japanese owners, while silicon wafer producers electronics was snapped up by a Taiwanese firm.

British based chip designer RM is also the target of a takeover bid and video and the U.

S wants to buy it for €33 billion.

Authorities could still intervene.

18 EU member states declared the semiconductor industry as strategically important Back in December.

The industry is set to receive billions in EU subsidies to maintain Europe's technological independence.

The world's chip makers are mainly concentrated in Asia, with a 70% market share.

The world's largest supplier, TSMC, is based in Taiwan.

American firms have a roughly 20% share of the market, while Europe lags behind at 8%.

European firms long underestimated the importance of microchips.

Just take cars and trucks.

Europe, long specialized in high quality mechanical engineering.

But today's vehicles are increasingly resembling Dr Herbal computers.

Europe has neglected the semiconductor industry, long seen as low margin and volatile, that's now become the continent's Achilles heel.

For more, let's bring in our business correspondent Chelsea Delaney, Chelsea.

We heard about the troubles the shortage of semiconductors are causing to the auto industry in particular.

Will this deal now help resolve the problem?

No.

The shortage in semiconductors is likely to last for for several more months, at the very least, despite these mergers.

And this is particularly a problem for the auto industry because we've seen a huge increase in demand for semiconductors as there's been a boom in sales of home tech equipment, people moving to home office people buying things like PlayStations.

And it's much more profitable for semiconductor makers to make the products for that tech equipment instead of the auto equipment.

That's a very low margin business.

So all of the capacity right now is being directed at the home tech market.

Uh, and so these these mergers that we're seeing it will in the long term likely boost production.

But for now, automakers are really low down on the priority list for semiconductor makers, and it takes a long time to ramp up capacity now.

Chelsea In a different aspect of the story, German political leaders have been worried recently about German companies, including their technology being taken over by foreign players.

Now what's the mood regarding this takeover of silt tronic by global waivers?

It's definitely causing anxiety both here in Berlin and at the broader e level, because the EU really is pushing forward with the digitalization.

That's really the future they see.

And that future is dependent on access to chips.

And the EU doesn't want to be dependent on Asia or the U.

S.

For access to semiconductors, because we've seen how that technology can be used as a pawn in some of these geopolitical conflicts like we've seen between the US and China in the past few years.

So the EU really wants to secure its own independent base of of chips and and deals like this raised concern that that's not going to be possible.

Charles de Delaney.