Auto production lost to chip shortage
February 19, 2021 - A shortage of semiconductors has hit carmakers around the world. Analysts predict the lack of chips -- used in engine management and driver-assistance systems -- will wipe out $61 billion of sales in 2021.
Auto plants in the United States, Asia, and Europe have temporarily shut down as the semiconductor shortage makes it impossible to complete some vehicles' production.
Automakers are sending their chip supplies to their most profitable, most essential products. For example, Ford shut down its Louisville Assembly Plant in Kentucky for a week to allow it to continue full production of its popular F-150 pickup.
Chip production has been disrupted in Asia for months, as consumers, in lockdown due to the pandemic, purchase laptops, smart speakers and gaming systems. Launches of high-end computer graphics cards needed for new video games have also been affected by the chip shortages.
Fitch Solutions predicts the North American auto market will have the lowest growth level of just 5.9% in 2021. Europe will be the best performing region in 2021 with projected vehicles sales growth of 10.8, according to the financial information company
The shortage now threatens to hit the much larger electronics industry. A broad range of gadgets -- from smartphones to gaming consoles -- could see shortages or price hikes.