Why the token shortage is a spoiler, Auto News, ET Auto
The global crisps shortage that power modern gadgets and cars are disrupting the business plans of industries large and small.
- Reliance Jio delayed the launch of its recently announced “ultra-affordable” smartphone, the JioPhone Next, which will be produced in collaboration with Google, due to a shortage of chips.
- The passenger car sales in India fell 13.8% sequentially (from the previous month) in August as automakers, stifled by lack of semiconductor supply, slowed production.
- Main car manufacturers, including Maruti Suzuki, Tata and Mahindra and Mahindra, had stalled production and / or reduced shifts due to the supply shortage, despite an expected increase in demand due to the holiday season.
- Global car manufacturers are also penalized by the shortage. Toyota on Friday reduced its annual production target of 300,000 vehicles. US majors Ford and General Motors and German luxury automaker Daimler, among others, have also cut production.
- Experts are waiting the shortage will continue until 2023, disrupting the economic recovery of several countries.
- Thus the conditions that caused the shortage are still in play: the rapid growth of cloud computing and the rollout of 5G in major economies.
- According to the research firm The IDC, computer and wireless industries account for over 50% of global chip demand by value. The automotive industry represents less than 9%.
So governments intervene.
- South Korea announced a 10-year, $ 450 billion plan to modernize and expand foundries (chipmakers). He also controversially released Lee Jae-yong, vice president and de facto executive of Samsung, the world’s largest semiconductor company, prematurely from prison.
- United States announced grants worth $ 52 billion to bolster its chip industry.
- China is pushing for “self-sufficiency” in semiconductors. Last week, China’s minimum wage announced an investment of $ 8.87 billion for a new chip factory in Shanghai.
- IIndia also “urged” companies to set up smelters there, although expectations are moderate. Currently, India imports all of its semiconductors, worth around $ 24 billion, according to CII. Demand could reach $ 100 billion by 2025, he says.
Follow and connect with us on Twitter, Facebook, Linkedin, Youtube