Covid-19 – Chip Shortage May Loom Auto Manufacturers in 2021
The covid-19 impact has been ubiquitous. In the last few quarters, the growth of the semiconductor industry has also stalled. Another industry which relies mostly on semiconductors is Automotive. According to few reports, the Automobile industry during the pandemic has faced an unbelievable shortage of semiconductors. The impact has been so severe that Germany-based Volkswagen, India’s Mahindra and Mahindra and Chinese producers have stated that this lack of availability of semiconductors for electronic systems in the Automobile is expected to reduce vehicle output into 2021.
“The massively restricted supply situation for semiconductors is causing considerable disruptions in global vehicle production across all manufacturers,” Volkswagen shared to a news website. “Due to the Covid-19 pandemic and the resulting decline in sales in the automotive industry, leading semiconductor manufacturers switched their production to other customer industries, such as consumer electronics. In the meantime, however, the car markets have recovered significantly, especially in China. This exacerbates the current situation and the industry — and also the Volkswagen Group — lacks appropriate electronic components.”
In China, economic stimulus measures are promoting sales of electric and traditional vehicles Automobile industry, but production is likely to slow in the first quarter because of the shortage of semiconductor chips, the China Association of Automobile Manufacturers said. And Chinese electronics manufacturer Huawei stockpiled semiconductor chips over the summer ahead of a US government ban on domestic producers exporting to the company, exacerbating the supply tightness.
The use of semiconductors is increasing in traditional and electric vehicles in the Automobile industry , as manufacturers develop advanced driver features and electronic entertainment systems that require sensors, integrated circuits and power controllers.
At the same time, the pandemic has accelerated semiconductor demand from consumer electronics producers, because of increased use of laptops and consoles for home working, education and entertainment. The rollout of the new 5G telecom network base stations and devices is further driving demand globally.
