SHORTAGE OF SEMICONDUCTORS INDUCING A HALT TO AUTOMOBILE INDUSTRY.
It is absolutely not new to us, seeing Science and technology advancing faster than the fastest Racing cars.
Metals, Non-Metals, Conductors, Insulators, Alloys, Amalgams have become one of the most important parts of the automobile industry. Cars have almost turned into a computer with four wheels. Most of them these days come in with features like heads-up displays, autonomous driving aids, etc. Metals, non-metals, and alloys are usually used in building the carcass and the various parts of the car.
Comparatively the use of semiconductors is a recent additive. Basically, Semiconductors are materials that conduct electricity partially and now are one of the strongest pillars on which the Automobile industry is standing. They are usually made from elements like germanium and silicon, along with compounds like gallium arsenide. Semiconductors are the ones to be grateful to for making recent cars so tech-savvy.
In cars, the semiconductors help in maintaining the electrical aspects of the cars thus converting various manual functions into electrical ones. One of the greatest demands in today’s car is enhancing the driver’s assistance systems. This calls for incorporating many advanced semiconductors which would help in providing services like backup cameras, blind-spot detection, lane change assist. Though it is in the news that the availability of semiconductors is hitting the trough due to the onset of the global pandemic.
The sudden fall in car sales, due to the first wave of Lockdown has triggered the fall in the requirements of various auto-materials, the semiconductor being one of them. So chip manufacturers diverted and poured their investments and sales in other sectors like the washing machine, microwave, laptop manufacturing companies. As the increase in car sales hit the market in late 2020, enough number of chips were not available for them.
Maruti Suzuki Chairman, RC Bhargava in a recent meeting with the company shareholders said that the following scarcity in the following field might get dissolved by 2022, though it has not impacted Maruti. In the virtual meeting, he revealed that Maruti will soon become a major name in the automobile sector when it comes to Electric Vehicles.
This crisis in the semiconductor industry has not entirely affected all companies. For example,
- Toyota has revealed that it has diversified its supply chain along with the increase in inventory of components after several series of natural disasters hitting Japan.
- On the other hand companies like Ford has been bound to stop their production in Kentucky around late 2020. It also ordered a month-long pause in production at a Germany Factory.
- Stellantis had to narrow down its output at various factories in Mexico, the US, Canada around the same timeline.
- Audi had to fire around 10000 employees in Germany due to problems with several supply levels.
Major automobile companies like Mazda, Nissan, GM have halted their production due to the shortage of Semiconductors. The total loss of the industry has been rounded around to about $61 Billion. The shortage of manufacture of Semiconductors and chips has coaxed shutdowns at OEMs and has an impact on parts suppliers who rely on OEMs for their business.
Once a leash is put on about the pandemic situation in the world, and other alternatives have been found, the situation could get stabilized.
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