In industry: why the semiconductor shortage is hitting hard
What do power steering, brake sensors, parking cameras, infotainment systems and more have in common? Semiconductors or computer chips – and they’ve been in the news a lot in recent months.
This is one of the reasons many new cars aren’t available until September, as a global fight against buns rages on over limited supply, with just two of the highest-quality chipmakers existing in the market. the world and supplying most of the products. – enough bottled chips from around four manufacturers.
For automakers, it’s another kick under the belt. It was born out of the pandemic, with automakers working on “ just-in-time ” principles and balancing complex supply chains responding to shutdowns by canceling orders, only to find the loosening of their created actions in car makers. squeezed chips sold to booming phones and games. companies.
The car manufacturers concerned – who adapt between 50 and 1000 chips to each car, depending on its complexity – are harmed. They had long standing contracts which were suspended by force majeure. But what they failed to predict is that global demand for chips would – despite everything – increase by 15% last year.
Chipmakers are therefore saying the auto industry needs to get back on line, although that doesn’t help the fact that these are relatively small customers, accounting for less than 10% of the £ 250bn in sales. of chips every year.
The magnitude of the problem becomes evident: Ford has revealed it will produce 1.1 million fewer cars this year due to the challenge, and reports are coming in of some new cars having de-specced digital bell and whistle dashboards. on all but high-end models. While automakers say the problem will continue until the fall, chipmakers say it takes 40 to 100 weeks to build a new production line.
As leave programs around the world run out, the ripple effects of factories that cannot finish cars must be increasingly alarming. Reports suggest that many automakers are prioritizing their most profitable (SUV, in general) and greener (electric and hybrid) models. The problem is, our research suggests that a hybrid uses up to 10 times more chips than a base gasoline model.
To some extent, retailers can weather the storm, supported by a move towards near-new and used sales. For automakers, the headaches keep coming – and this one could rival the pandemic for its global impact. Customers, on the other hand, must decide how much patient they are willing to be. Eager buyers need to act quickly, but with low supply and high demand, don’t expect to haggle.
Analysis: Chips are down for automakers as shortage continues
Global chip shortage: Audi lays 10,000 workers as production slows
Semiconductor crisis: Tesla is back in force, Mini closes Oxford plant