Why Are Cars Lacking Chips Now?
2 Answers
There are five main reasons for the automotive chip shortage, analyzed in detail below: Global semiconductor tension: From the overall perspective of the semiconductor industry, supply-demand tension has been evident in recent years. As industries continue to upgrade their technologies, the demand for chip products is also increasing. COVID-19 pandemic: With the rapid recovery of the Chinese automotive market, due to the production cycle of the chip industry, new orders from automotive companies are being scheduled later, leading to the automotive chip shortage that began in the fourth quarter of last year. Overstocking by electronics companies: Excessive stockpiling by electronics companies has exacerbated the automotive chip shortage. Unforeseeable factors: Unforeseeable factors have reduced chip production capacity in the short term, causing semiconductor manufacturers to cut or halt production. Panic stockpiling in the automotive industry: Panic stockpiling in the automotive industry has worsened the chip shortage.
I recently discussed the car chip shortage issue with friends, and it's mainly due to supply chain disruptions. During the pandemic, many chip factories shut down, especially those in Asia, causing a sudden drop in production capacity. At the same time, with people working from home, there was a surge in demand for computers and smartphones, which consumed a large portion of the chip production capacity. When car manufacturers resumed production and wanted to increase output, the chip supply couldn't keep up, forcing many automakers to halt production lines. Chips are widely used in cars, from engine control to smart driving systems, and producing these chips is a slow process. Expanding wafer fabrication plants takes time, and with logistics disruptions and frequent shipping delays, the problems have piled up. The shortage is severe now, with new cars taking months to be delivered. Automakers are trying to adjust production lines or find alternative solutions. In the long run, global cooperation and increased investment are needed to resolve this issue.
