Semiconductor Chip Shortage is crippling the auto industry
There is a global shortage of semiconductor chips and car makers are forced to cut output
Ford, the No. 2 U.S. automaker, will run one of three shifts of production at one plant that builds its highly profitable flagship F-150 pickup trucks. Ford’s F-Series has been the best-selling truck in the U.S. for the past 44 years.
The global shortage of semiconductor chips could result in the loss of 10% to 20% of planned first-quarter production.
Ford is not alone in suffering from a chip shortage that is crippling the auto industry. Volkswagen was among the first to sound the alarm of the semiconductor chip shortage in December last year, warning it was preparing for production disruptions. The company then made some production cuts in North America, Europe, and China. Audi also sent staff home. Nissan too was early to react, curtailing some Note production in Japan in January because it was low on chips.
The industry use of semiconductors is continuously growing, as cars add increasingly sophisticated technology. Besides, electric vehicles only increase this demand. Demand which is hight also in the consummer electronics industry, so automakers must compete with this sector for the chips that go into smartphones, gaming consoles, computers, and televisions. All these have been in high demand with people staying home due to COVID-19.
