A shortage of semiconductors

Auto companies worst affected The global economy suffers from a shortage of semiconductors

Some companies fear that the shortage of semiconductors will extend to an additional two years. 

At first, analysts thought the semiconductor shortage that hit the global economy last winter was just a passing cloud that would pass in the second half of the year. On the other hand, things did not go this way, but the shortage of this product became more severe.

Dmitry Migonov said - in a report published by the Russian newspaper " Izvestia " - that the new waves of the mutated virus weakened the economy in most countries of the world, and the car manufacturing sector was the most affected by this situation, as major car manufacturers took decisions ranging from closing factories and extending Summer vacations for employees and further production cuts, at a time when the future looks very uncertain.

Automotive sector problems

The writer said that during the past two weeks, the major car manufacturers in the world took various packages of "crisis management measures." For example, Toyota will cut production by 40% in September and reduce the number of cars it will put on the European market by 40,000 units.

As for Ford, it closed its factory in Cologne, Germany, for a week, and in its factories in the US, the production of light transport vehicles, F-150, was suspended. The company "Audi" (Audi) decided to extend the vacations of its employees in Germany, and accordingly wove the "Volkswagen" (Volkswagen) at its factory in the city of Wolfsburg.

All this is happening in a period when the global economy is no longer experiencing a major contraction, but on the contrary is experiencing a rapid recovery with the increase in demand for goods and finance, so many now want to buy a car, but the problem is the lack of supply due to the scarcity of semiconductors.

Asia at the center of the crisis

The problem is getting worse over time. In August, Malaysia witnessed the outbreak of a new wave of the epidemic. The East Asian country is not a major manufacturer of electronic chips like Japan, South Korea and Taiwan, but it has become a major center for semiconductor testing and packaging.

The Malaysian government is doing everything in its power to deal with this crisis, as it allowed 60% of workers to be employed at the same time, and then raised this percentage to 80% if the workers had received the vaccine, but so far does not exceed the proportion of Malaysians who are immune to the virus. Corona is 57%, and therefore disruption of the work system is inevitable.

Also, some Malaysian companies closed their doors for weeks to make way for sterilization operations, especially ST Micro and Envion, which supply the car manufacturing sector with electronic chips.

In general, the waiting period between the date of submitting the request to supply the chips and the date of obtaining them amounted to 20 weeks, and the waiting period witnessed an increase of 8 days during the past month, amid expectations that this delay will continue until the end of the third quarter of this year at least.

The shortage of semiconductors particularly hits the electric car sector (Shutterstock)

Why do car factories suffer more than others?

These factories are usually affected by the lack of semiconductor supply more than other sectors, because computer manufacturers enjoy preferential treatment by suppliers, as they are the most important customer and are given priority, and in return they pay more than others. With the onset of the crisis, these companies succeeded in setting accurate forecasts about the growth of sales of computers, smart phones, routers, and electronic game consoles, and dedicated their efforts and resources to responding to this demand early.

On the other hand, no one expected the auto sector to recover quickly from the Corona virus crisis, and speculation was that the auto market would suffer from a depression and a lack of demand for a long time, and that is why even the largest car manufacturers are now suffering from a shortage of semiconductors.

Even as some companies quickly tried to buy and store semiconductors, this deepened the crisis in the market and exacerbated the tight supply. Some companies have resorted to focusing on the manufacture of luxury and expensive cars, to compensate for the additional expenses that they are incurring.

This shortage of semiconductors particularly hits the electric car sector, which needs to manufacture a larger number of these electronic parts, and the same problem is faced by plans to establish suitable infrastructure for electric cars, such as providing battery charging stations.

Other sectors are going through the same crisis

The list of industries affected by the semiconductor crisis is not limited to automobile manufacturing. For example, Russia recently faced a crisis that threatened to disrupt the extraction of bank cards, and the production of some devices such as smart phones will witness delays in the delivery of many orders.

In general, Goldman Sachs analyzes indicate that this problem has affected approximately 169 economic sectors around the world, including unexpected sectors, such as metal containers, pumps, chemical industries and wholesale trade.

Some companies fear that this shortage in semiconductors and the resulting disruption in production may continue for an additional two years, and the only solution that may lead to adjusting the market is not to increase the production of semiconductors, but rather is the lack of consumer demand for products whose prices will rise because they contain semiconductors. connectors.

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