The scarcity of semiconductors came on the left, hitting the industry at a dangerous time. Sales plummeted worldwide. In Europe, for example, they fell 25% in 2020.
This is all happening while automakers are trying to navigate a change in basic battery combustion engine technology, which has subjected them to new competition from Tesla, the California company that has become the most valuable automaker in the world. by far, and emerging Chinese manufacturers like Nio.
Exactly how long the scarcity will last is unclear. It can take 20 to 25 weeks from the time new orders are placed for chips to be produced and work through the supply chain to get to cars, said Michael Hogan, senior vice president at GlobalFoundries, a major manufacturer of chips that serves the automotive industry and other markets.
“We are doing everything that is humanly possible to prioritize our automotive production,” said Hogan.
German automotive electronics supplier Bosch said the shortage is particularly acute for integrated circuits used to control engines, transmissions and other important functions. “Despite the difficult market situation, Bosch is doing everything it can to keep its customers supplied and to keep any post-impact to a minimum,” the company said in a statement.
Automakers and suppliers are reacting in the best possible way. BMW, based in Munich, said it managed to maintain production, but is “watching the situation intensely” and in constant contact with suppliers.
For automakers already stressed by the pandemic, some impact is inevitable. Honda said on Wednesday that it would end some production activities at its factory in Swindon, England, which builds the Civics, for at least four days starting on Monday. Honda cited problems in the supply chain, including a lack of semiconductors.
German supplier Continental, better known for tires, but also produces electronic components, called on semiconductor producers to increase the capacity of chip-making foundries.