Semiconductor Chip Shortage Holds the Auto Industry Back on Production

Semiconductor chips have made the very core parts of many important products including automobiles. The worldwide pandemic Covid-19 has led to a global semiconductor chip shortage on the scale of nearly $60 billion. Without the supplies of some essential semiconductor chips, automakers have to stop temporarily the profitable production lines of important products. According to Detroit Free Press, the Covid-19 could cause a reduction of up to 1.28 million vehicles produced in the U.S. in 2021. The consequence of the reduced production could be far beyond the industry itself, but the workers and the communities who serve the industry due to halting production and canceling shifts according to John Bozzella, the president and CEO or the Alliance for Auto Innovation, who represents the major players in the automotive industry, including GM, Ford and Stellantis. The struggle the auto industry is experiencing has had a ripple effect on the supply chains. According to LA Progressive, the production cut of Ford F-150 pickups and other vehicles has cut the amount of supply by Arconic Davenport Works, who manufactures aluminum parts for many vehicles, including F-150 pickups of Ford. The ripple effect caused by cutting back of production of the automotive industry echoes with the cross-board layoffs in downstream supply chain members like Arconic Davenport Works who has already been seeking a rebound from the Covid-19.

A GM plant in Wentzville MO has reduced production due to semiconductor chip shortage x1000 (Source: Jeff Roberson/Associated Press via www.nytimes.com)

The current automotive crisis caused by the widespread semiconductor chip shortage seems to be temporary. But the actual span can be longer than it is expected. The industry has been deeply affected that almost all companies are  reported to be troubled by the chip shortage on different scales. According to CAR AND DRIVER, the following auto models are being affected:

  • Audi Q7/Q8 Porsche Cayenne Volkswagen Touareg
  • Chevrolet Camero Equinox, Malibu, Traverse
  • Cadillac XT4/XT5/XT6
  • GMC Acadia
  • Ford F-150, Explorer, Mustang
  • Lincoln Aviator and Nautilus
  • Jaguar XE, XF, F-Type
  • Lan Rover Discovery, Range Rover Evoque
  • Jeep Grand Cherokee, Dodge Durango
  • Mercedes-Benz C-Class, GLC, EQC
  • Mitsubishi
  • Nissan Altima, Leaf, Maxima, Murano, Rogue
  • Subaru Ascent, Impreza, Legacy, Outback

Reference:

https://www.freep.com/story/money/cars/2021/04/06/automakers-semiconductor-shortage/7108271002/

https://www.laprogressive.com/semiconductor-shortage/

https://www.caranddriver.com/news/g36218381/car-models-affected-chip-shortage/

https://venturebeat.com/2021/04/01/global-chip-shortage-affects-more-than-cars/

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