comment on this article

Global chip shortages impact automotive industry

The global automotive industry is facing massive disruption with leading brands cutting production due to reduced supplies of semiconductors.

Across Europe and India, in particular, car manufacturers are struggling to source sufficient semiconductors and while semiconductor manufacturers are responding it’s likely that additional volumes will not become available for another 6-9 months.

As a consequence, car manufacturers are facing a potentially crippling shortage, with growing bottlenecks causing significant problems. Volkswagen is expecting to produce 100,000 fewer cars in the first quarter of the year, because its suppliers have struggled to secure supplies from their contractors, while Nissan and Honda have both signalled cuts in production of up to 20 per cent.

The problem has been exacerbated by semiconductor manufacturers switching production to other customer industries, such as consumer electronics, in the face of the Covid-19 pandemic and by car manufacturers ramping up production far more quickly – especially in China - than semiconductor manufacturers had expected. The problem has also been made worse by a big increase in electric vehicle production, which has increased the industry’s demand for semiconductors.

There’s no quick solution and the situation is becoming critical and likely to worsen in the next few months, with analysts expecting it to persist well into 2021.

Author
Neil Tyler

Comment on this article


This material is protected by MA Business copyright See Terms and Conditions. One-off usage is permitted but bulk copying is not. For multiple copies contact the sales team.

What you think about this article:


Add your comments

Name
 
Email
 
Comments
 

Your comments/feedback may be edited prior to publishing. Not all entries will be published.
Please view our Terms and Conditions before leaving a comment.

Related Articles

Worrying times

News that UK companies might be shut out of the Galileo programme raises ...

Software and security

Last month Embedded World once again demonstrated why it’s described as the ...

Close to the edge

“We are entering a new era where artificial intelligence systems are helping to ...

Striking a balance

The UK government is said to be taking a close interest in the sale of Ultra ...

Getting real with VR

Professor Robert Stone has been involved in the world of virtual, augmented and ...