Chip shortages hit global automotive supply chains

Industry News | | MIC Customs Solutions |

Several major auto manufacturers have been forced to halt or reduce production due to problems acquiring essential computer chips.

Automakers around the world are facing production problems as they struggle to import vital computer chips, with factors such as coronavirus-related travel restrictions and the US-China trade war contributing to the shortage.

Bloomberg reports that manufacturers including Toyota in Japan, Ford in the US and Volkswagen in Germany have all warned of difficulties securing the semiconductors needed for their vehicles.

Several firms have therefore looked to cut back on production until the shortage can be resolved.

Honda, for instance, has reduced output at five North American factories as it becomes harder to procure chips, while Ford told Bloomberg: "The global semiconductor shortage is presenting challenges and production disruptions." 

One reason for the shortage is that supplies are being diverted to household goods such as smart TVs, laptops and games consoles. These items have been in especially high demand in recent months as Covid-19 restrictions have led to more people seeking entertainment at home.

Meanwhile, sanctions imposed by US president Donald Trump on Chinese tech firms have also had an impact. This has constrained supply from key manufacturers such as Semiconductor Manufacturing International Corp and forced customers to look elsewhere.

The problem will need to be solved quickly as cars become more dependent on these technologies.

By 2030, semiconductor-based parts will account for more than 50 per cent of a car’s manufacturing cost, up from about 35 per cent now, according to a report by China EV 100 and Roland Berger. 

As a result, ensuring global trade in these components is as smooth and frictionless as possible will become a top priority for the sector.