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I would like to announce you last updates of global industrial spare parts shortage crises due chip shortage starting with pandemics. Hope that this information is helpful for you to understand current industrial business situation. I would like to make clear you following questions and share information that I collected for You.
How are companies responding to the chip shortage and what are policymakers commenting? Here we sum up the most important events related to the global shortage of microchips :
The chip shortage continues in 2022. While some experts believe that the situation will improve this year, others are convinced that the crisis will persist into 2023. This article is updated continuously and summarizes the most important chip shortage news in July 2022.
Intel CEO: Chip shortage to ‘drift’ into 2024
Six months ago, Intel CEO Pat Gelsinger said that the global chip shortage would last until at least 2023. Now, he says it might be 2024 before we start to see a return to normality.
“We believe the overall semiconductor shortage will now drift into 2024, from our earlier estimates in 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenged,” he recently said in an interview with CNBC.
While this sounds like terrible news, it is important to remember that when he says the shortage will last until 2024, he is talking about the chip industry’s ability to meet demand for new products, not just existing ones. “We expect the industry will continue to see challenges until at least 2024 in areas like foundry capacity and tool availability as an IDM,” he added.
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Intel is one of many chipmaking giants ramping up investments in infrastructure, by building new fabs in Arizona, Ohio, and Germany. However, current timelines estimate that these will not come online until well into 2024 — when the shortage will, hopefully, be over for the most part.
Ford has lost US$3.1 billion due to chip shortage
Ford Motor Company said that it has lost US$3.1 billion over the past three months in a report dated April 27, largely due to the ongoing semiconductor shortage that has limited the number of SUVs and pickup trucks available for sale in North America, but also because of the company’s huge investment in EV start-up Rivian.
Ford CFO John Lawler was eager to stress that the company made US$2.3 billion in pre-tax profit, however. "Clearly the demand for our new products is very strong," Lawler said. "We continue to have issues with supply of chips, which constrained us, and in particular here in North America, it hit us disproportionately on our large vehicles."
The ongoing chip shortage has forced Ford and General Motors to close many of its North American factories for weeks at a time over the course of the last year. This has caused huge shortages of its vehicles, including a 9 percent drop in the number of vehicles sold in Q1 2022 when compared to the same time a year earlier.
UK car production reports weakest March figures since 2009
UK car production fell by 33 percent in March, making it the worst March for production figures since the financial crisis in 2009. The Society of Motor Manufacturers and Traders (SMMT) said that only 76,900 cars were produced, compared with 115,498 produced in March 2021. The SMMT attributes this fall to a decrease in production for overseas markets.
The automotive industry has been hit hard by soaring metal and energy prices, pandemic-led supply chain issues, and the ongoing shortage of semiconductor chips. Russia’s invasion of Ukraine has also left automakers looking for alternative supplies of important parts, including electrical wiring, aluminum, and nickel.
These challenges meant that in total, 100,000 fewer cars were manufactured in the first quarter when compared to the same time last year. "Recovery has not yet begun and with a backdrop of an increasingly difficult economic environment, including escalating energy costs, urgent action is needed to protect the competitiveness of UK manufacturing," said SMMT CEO Mike Hawes.
Mercedes-Benz inventor high in Q2 amid chip shortage
German automaker Mercedes-Benz has said that it expects its vehicle inventories to remain high in the second quarter of 2022 as supply chain bottlenecks continue to hinder production and deliveries.
"There is quite a high number of blocked vehicles - a part of that will be turned around but there will be new ones coming," CFO Harald Wilhelmsaid on an analysts’ call on April 27, after the carmaker reported first quarter results.
Although the automaker’s high pricing strategy is partly based on product scarcity, the company admits that it could have sold more vehicles in the first quarter without cutting prices. “It’s a shame as the semiconductor situation puts a constraint,” Wilhelm added.
Roughly half of the 1 billion euros reported by Mercedes-Benz in the first quarter were due to increases in the price of raw materials, with the rest split between energy and logistics costs, and the inefficiencies of stopping and starting production lines in response to supply chain issues.
Chip shortage causes Volkswagen to remove features from several models
It was recently reported that Audi is removing popular features from some of its models to keep vehicle production moving amid the ongoing microchip shortage. Now, Audi’s parent company Volkswagen is also stripping features from some of its most popular vehicle models to help safeguard inventories.
The automaker is reportedly set to remove features from lower- and mid-trim versions of its Atlas, Tiguan, and popular Golf GTI and Golf R models while retaining them in high-end and top-of-the-line models of the same. This approach is the opposite of Audi, which is removing features including Invidia tire pressure display, wireless charging pads, and integrated toll modules across the board from certain vehicle models.
Volkswagen’s decision to cut features will see the Harman Kardon sound systems axed from some Golf GTI (SE and Autobahn) models and the hands-free liftgate from some Golf Tiguan (SE and SE R-Line Black) models.
Honda to cut production at Japan plants
Honda is planning to cut production by as much as 50 percent on two lines in early May at one of its Japan facilities as the automaker quotes the ongoing chip shortage and COVID-19 lockdowns as the cause.
Production will be cut at the automaker’s Suzuka plant, where it produces the Fit and N series mini-vehicles, as well as components for Honda’s overseas factories spread out across 27 nations. Meanwhile, production at a factory in Saitama prefecture that was reduced by a third in April April will be restored to normal operations, the company said.
This isn’t the first time that Honda has had to pause its production lines. In March, the automaker reduces production at two other plants by 10 percent through t the end of the month. At the time, Honda again pointed towards the chip shortage and geopolitical uncertainty.
Rivian CEO warns of an issue greater than the chip shortage
RJ Scaringe, the CEO of Rivian, has warned that the automotive industry could face a challenge that will dwarf the ongoing chip shortage. He has described the current shortage as a “small appetizer” in comparison to the potential damage that a shortage of EV batteries, and the metals needed to make them, could cause.
As reported in the publication Manufacturing Business Technology, Scaringe said, “All the world’s cell production combined represents well under 10 % of what we will need in 10 years,” adding that his projection would mean that as much as 95 percent of the supply chain needed currently does not exist.
To secure battery cells, Scaringe said Rivian plans to diversify its suppliers and build capacity to create its own. According to a recent report by the Center for Automotive Research (CAR), battery cell production will not meet demand until 2030.
Tesla CEO Elon Musk has also gone on record to warn about a future scarcity of battery supplies, tweeting that Tesla might have to get into the mining and refining directly at scale unless costs improve.
