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buying The car industry's chip shortage is far from over

12:52  28 august  2021
12:52  28 august  2021 Source:   cnet.com

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What automakers hoped would be a temporary setback simply isn't happening. According to a Friday Bloomberg report, major Japanese semiconductor chip supplier Rohm said it foresees chip shortages throughout next year. It' s not that the company can't build chips quickly enough, but the fact that its own supply chains are involved in serious bottlenecks.

What automakers hoped would be a temporary setback simply isn't happening. According to a Friday Bloomberg report, major Japanese semiconductor chip supplier Rohm said it foresees chip shortages throughout next year. It's not that the company can't build chips quickly enough, but the fact that its own supply chains are involved in serious bottlenecks.

a group of people in a parking lot: This scene at car dealerships is very common. Justin Sullivan/Getty Images © Provided by Roadshow This scene at car dealerships is very common. Justin Sullivan/Getty Images

Speaking with the publication in an interview, Rohm CEO Isao Matsumoto said its lines continue to operate at 100% capacity as it works to fill backlogged orders from automotive customers. Ford, Toyota and Honda are three of its largest customers. However, the executive said orders are "overwhelming" and major investments to boost production won't create quick returns. The company will invest another $636 million to further maximize production, but equipment to boost output isn't arriving on time. In addition to the general supply chain problems for the chip maker, the COVID-19 delta variant complicates things further, he said.

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Why is the car industry suffering? New vehicles have dozens of microchips in them to control everything from power steering and car stereos to acceleration and electric windows. Several car manufacturers cancelled semiconductor orders at the start of the pandemic because they were concerned about a drop in sales. But when sales recovered faster than expected, the car giants found themselves at the end of the line for chips . Sweden' s Volvo, Germany' s Volkswagen and Japan' s Toyota all announced this week that they will have to reduce production further if there is not an

The global chip shortage is having a significant impact on the automotive industry , leading to lost production and lost sales—how long will car buyers be waiting before this is resolved and inventory is restored? Author of the article: Sami Haj-Assaad. A year ago, the COVID-19 pandemic had everyone questioning their buying habits and decisions. Toilet paper stock disappeared at the local shops, and items essential for working at home like desks and chairs have been hard to find at the local Ikea as well. Others faced far more dire situations like layoffs and lost work, and some resorted to hoarding

a group of people sitting in a parking lot © Justin Sullivan/Getty Images

Matsumoto added customers offering to pay more to receive their chips quicker does no good since there simply aren't enough of them anyway. The material creating the most headaches are lead frames, which create a chip's metal structure inside the semiconductor.

Automakers across the board continue to deal with the massive consequences of the ongoing shortage. General Motors, Ford, Toyota and others announced additional factory downtime at their production facilities. Toyota, in particular, cut 40% of its global production output as it looks to tougher times ahead with fewer chips. Meanwhile, auto sales may start to feel a real impact as inventory grows even tighter. While dealers and automakers bank profits from customers willing to pay a premium on new vehicles, sales could start to contract with too few new cars to go around.

This was originally published on Roadshow.

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