SEMICONDUCTOR SHORTAGE WILL HIT AUTOMOTIVE GLOBAL SUPPLY CHAIN AND PRODUCTION
A global shortage of semiconductors is causing the production of parts and vehicles to be disrupted. Several major carmakers and their suppliers are being impacted by a supply bottleneck caused by diverse factors, including the effect of Covid-19 on demand in the first half of 2020 and manufacturing investment. The shortage is the product of a perfect storm, as the automotive sector saw more volatility in 2020 than any other industry that purchases semiconductors. At the same time, capacity constraints in semiconductor facilities were caused by high demand from other industries. The subsequent recovery in car sales and factory production was stronger than expected in all areas, owing to pent-up demand during the lockdown. Semiconductors are the brains behind a growing number of items, including vacuum cleaners, refrigerators, computers, and space shuttles. Hundreds of integrated circuits monitor airbags, power windows, catalytic converters, and dashboard displays in the typical car.