A new kind of chip shortage has hit Japanese supply chains, with McDonald's forced to ration fries in the country as Covid-19 and floods in Canada squeeze potato imports.

McDonald's Japan said it will only sell small-sized French fries for a week from Friday to avoid shortages.

"Due to large-scale flooding near the Port of Vancouver... and the global supply chain crunch caused by the coronavirus pandemic, there are delays in the supply of potatoes," it said in a statement on Tuesday.

McDonald's Japan will only sell small-sized French fries for a week
McDonald's Japan will only sell small-sized French fries for a week GETTY IMAGES NORTH AMERICA via AFP / JOE RAEDLE

The company said it has taken the measure to ensure that customers can still order fries, even though the "stable procurement of resource materials" is proving difficult.

The restriction comes during the busy year-end period, with schools and offices beginning to close for the holidays.

It will also be in place on Christmas Day -- commonly celebrated in Japan with a hearty serving of another US fast-food behemoth, Kentucky Fried Chicken, which is heavily marketed around the festive period.

Meanwhile, a pandemic-fuelled global microchip shortage continues to plague auto giants including Japan's Toyota, which has announced production cuts due to the crisis and supply chain issues in Southeast Asia.