Chip shortage cripples global car industry

Photo: EPA

Jaguar Land Rover (JLR) has become yet another automotive producer that was forced to decrease and even stop production activities in its main facilities due to acute global semiconductor chip shortage, BBC reported. The chip shortage affects badly the car production sector as Covid-19 restrictions in most industrial countries have been eased and customer demand surges. However the car production sector has to compete with computer, telecoms and other hi-tech industries for the limited global chip supply.

Tata-owned JLR said in a statement: "We have adjusted production schedules for certain vehicles which means that our Castle Bromwich and Halewood manufacturing plants will be operating a limited period of non-production from 26 April.We are working closely with affected suppliers to resolve the issues and minimise the impact on customer orders wherever possible." The Castle Bromwich factory makes the Jaguar XE, XF and F-Type models, and employs about 1,900 people. Halewood makes the Range Rover, Evoque and the Land Rover Discovery Sport, and has about 4,000 workers. The Covid-19 pandemic has driven up demand for semiconductor chips for use in electronics such as computers, as people worked from home, and suppliers are struggling to adjust.

France's Renault also warned that the chip shortage was worsening. The carmaker Stellantis, which owns the UK Vauxhall brand, said it would replace digital speedometers with more old-fashioned analogue ones in one of its Peugeot models, as the fallout continues. Daimler, General Motors and Volkswagen have all suspended production lines at various times in recent weeks.

Modern cars contain complex electronics and are heavily reliant on semiconductors, which are used in systems ranging from engine management to parking cameras.

Today's cars are computers on wheels, festooned with electronics such as engine management systems, driver aids, cameras and entertainment gadgets. All of these need semiconductors, and right now the entire industry is struggling to get enough of them. It's fighting the consumer electronics sector for the supplies that are available. Further disruption over the coming weeks and months is inevitable, because it takes time to ramp up chip production. The question now is what carmakers can do to ensure they aren't caught out by a similar supply squeeze in future.

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