＂Chip famine＂ slams the auto industry under COVID-19
A global chip shortage has forced virtually every major automobile makers to halt some car production & furlough workers. Just as the industry was showing signs of recovery from the pandemic-related shutdowns last spring.
The rule of thumb of “fewer chips, fewer cars”, Semiconductors are crucial components that make computer-controlled systems in cars work — everything from engines to power windows, as well as driver-assistance and navigation features.
Automakers needed fewer chips when the pandemic forced car makers to halt production. Chipmakers curbed production then ramped back up, though they still can't meet the industry's abrupt demand rebound.
A tension long in the making. Chip appetite from the tech industry has been surging. But it skyrocketed when the pandemic supercharged appetite for electronics that need chips to operate.
The list of chip shortage victims keeps growing, according to the forecast of orders for packing packaging materials like WCLCSP carrier tape for precision semicon chips supplied by Nexteck Singapore Pte Ltd. The latest, slashing production of its top money-making F-150 pickup trucks because of the limited supply of the key auto component.
The company is bracing for a big hit: “Right now, estimates from chip suppliers could suggest losing 15% to 25% of our planned first-quarter production. That could translate into lost profits of $1 billion to $2.5 billion for 2021.
Nissan, Volkswagen, Toyota, Mazda and Subaru in cutting production output have all citing the semiconductor shortage.
The problem will result in nearly 700,000 fewer vehicles produced globally in Q1 alone, according to new research. The problem might not let up until Q3. The lost revenue could be as much as $61 billion on this year.
Major semiconductor suppliers, such as Taiwan-based Semiconductor Manufacturing Company, TSMC and United Microelectronics Corporation, UMC say they are investing to expand production, but that will take time.
The bottom line is "Automakers cutting production now because of a chip supply bottleneck will cause a cascade of issues throughout the supply chain.
However, not only will the automakers be cutting production, so will all of their suppliers. This will be very costly throughout the automobile industry.
