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NowCar Semiconductor Chip Shortage

The Effect of the Semiconductor Shortage on the Auto Industry

Written By, Jordan R

With the automotive industry moving forward and many automakers expanding their efforts to create more plug-in hybrid and electric vehicles (EVs) to add to their collective lineups, there is still a lot of work left to be done. Aside from the development of self-driving autonomous car tech and connected car technologies, several automakers have developed new powertrains to operate future concepts involving these new, green powertrains. However, in the world, there is a current chip shortage affecting multiple industries that make use of semiconductors, and trouble is already on the rise.

Here’s the thing – semiconductors are used in many kinds of electronics and in a variety of industries. Known as chips, semiconductors can power massive data-centers, modern automobile technology, and many consumer digital devices. 2020 may have ended, but the hardships of COVID-19 are not over, and a global shortage of semiconductors is affecting many industries. The automotive industry is one of those, with automobiles becoming more modern and digitally advanced every year. The more cars become similar to computers on wheels, the more power they will need to power technological features such as smart phone and wireless connectivity, heads-up displays, level 3 autonomous driving aids, sensors and LiDar systems for level 4 autonomy – all of this is possible thanks to semiconductors.

On the other end, plug-in hybrid electric vehicles (PHEVs) and electric vehicles (EVs) are also made possible by semiconductors, able to replace manual systems with electrical systems and reduce the amount of mechanical engineering required to operate the vehicle. As has already been demonstrated, alternative fuel powertrain systems offer a number of qualities, such as increased vehicle efficiency, reductions in carbon emissions, and minimizing oil dependency.

So now we have a problem. The automotive industry and others, including IT hardware, computers, industrial machinery and electric equipment, just to name a few, are being affected by semiconductor shortages in the world right now. Many companies in various industries have seen a 55-70-percent shortage in supplies, causing slow product development due to the scarcity of resources. The next three automakers to feel the struggle are Nissan, Suzuki, and Mitsubishi Motors. With Nissan and Mitsubishi a part of the Renault-Nissan-Mitsubishi Alliance, we wonder what this semiconductor shortage could mean for future concepts.

Nissan has already confirmed that the automaker will be adjusting its production of certain models while suspending the production of other models altogether. Plans for shutting down production at its factory in Kyushu in June for three days have already been put in place, with operations at Mexico and Japanese facilities in Tochigi and Oppama also being reduced. A lack of semiconductors have been cited as the reason for this. Mitsubishi Motors has reported to do the same, with changes taking place at at least five plants in Japan, Thailand, and Indonesia. A total of 30,000 vehicles could be affected due to the lack of resources.

Although not yet reported, Stellantis may soon face problems with its recent joint venture with Taiwan’s Foxconn, the company that manufactures 40-percent of all consumer electronics in the world. Foxconn did state that the global chip shortage isn’t going to end any time soon, but the company continues to expand. Several automakers have also reported to have already hit their target goal for the 2022 model year vehicles and claim the shortage won’t affect their availability.

With the effect this could have on the automotive industry, were electric vehicles just a passing fancy? Or perhaps those enhanced hybrid vehicles we discussed a few weeks back could become the new theme in the industry. It would cause a continued reliance on fossil fuels and oils, but 2020 has caused many things to change. One of the largest consumer industries in the world were surely to feel the effects in the long run. Join the discussion on NowCar social media.

Photo Source/Copyright: Unsplash/Brian Kostiuk