Who is Being Affected by the Chip Shortage?
March 16, 2021—Microchips and semiconductors are small in nature but large in necessity and businesses and automakers are currently suffering due to a global shortage.
First announced late last year, a global semiconductor shortage is wreaking havoc on automakers, consumer electronics, and more, causing many to pause production as the shortage catches up to the pace of manufacturing.
Semiconductors are essential components of electronic devices and can be found in cell phones, gaming systems, infotainment systems, and electric vehicles.
Many automakers are feeling the heat as literal billions have been invested into electric vehicles, but production is slowing until the semiconductors are available.
Early last month, General Motors announced it would be cutting production at three of its plants due to the semiconductor shortage.
This news came off the heels of another announcement made by the automaker of its intention to invest more than $2.2 billion into electrifying one of its existing factories, Detroit-Hamtramck Assembly Center, into Factory ZERO.
Factory ZERO will be the automaker’s first entirely EV-dedicated production plant and home to Ultium Drive, a system of drive units and electric motors to power its electric vehicles, provided there are enough microchips to go around.
In a press release, GM spokesman David Barnas said, “GM’s plan is to leverage every available semiconductor to build and ship our most popular and in-demand products.”
The chip shortage hit Ford so hard that it slowed manufacturing of one of its best-selling vehicles, the Ford F-150.
The automaker cut production lines on its F-150 at both its Dearborn production plant in Mich., and its Kansas City plant in Mo.
According to CNBC, the Dearborn plant went from three shifts a week working on the F-150 to just one. As for the Kansas City plant, it dropped from three shifts a week to just two.
Volkswagen, the second largest carmaker in the world, was one of the first to be notified of the chip shortage, and quickly pointed fingers to its suppliers, blaming them for a lack of planning.
But like many automakers, in early February, Volkswagen filed for reduced working hours in two of its German production plants (Kassel and Brunswick) as a precautionary measure for the looming chip shortage.
“That means that, depending on the supply situation, there can be adjustments in vehicle and components production over the coming weeks,” Volkswagen said, in a press release.
Honda and Nissan
This year, Honda and Nissan combined are expected to sell 250,000 fewer cars compared to other years, due to the global semiconductor shortage, as reported by AutoBlog.
Chip shortages have led the automakers to cutting back production, even for some of their most popular models, like Nissan’s hybrid Note.
As many automakers are feeling the crunch, Toyota has come out relatively unscathed in comparison, thanks to careful prepping.
According to AutoBlog, after the Fukushima disaster of 2011 when a nuclear accident took place following a tsunami and an earthquake, the automaker put a ‘Plan B’ in place.
Toyota’s plan required its suppliers to stockpile between two to six months worth of microchips for the country’s carmaker.