The effects of the pandemic continue to ripple into 2021, as automotive manufacturers are forced to halt production in response to what seems to be the early signs of a massive semiconductor shortage. While this semiconductor shortage is a distant result of the pandemic, it seems to have been more directly caused by complex and irregular demand, as well as poor planning.
Today’s vehicles house many complex electronic systems composed of advanced semiconductors, resulting in cars that contain around 50-150 chips each. Around a year ago, the pandemic caused a sharp decline in car demand, which in turn cause a sharp decline in semiconductor demand from the automotive industry. Semiconductor manufacturers responded by reassigning the capacity from the automotive industry towards other sectors such as consumer electronics, which remained in high demand throughout the pandemic. General Motors, Ford, Fiat Chrysler, Daimler, Volkswagen, Toyota, Nissan, and Honda are among the automotive manufacturers that have reported experiencing this semiconductor shortage.
As automakers adjust production and we begin to see how severe this semiconductor shortage is, analysts at Bloomberg estimate that carmakers will lose more than $14 billion in revenue over the first quarter of 2021 and $61 billion over the next year.
As we are faced with semiconductor shortages, how can purchasers of semiconductors fortify their supply chain? Supplier diversification is a simple but critical measure to ensure a supply chain’s resilience through turbulent times. At Aegis Components, our global network of suppliers has been vetted and refined over the last decade. We also maintain strategically placed locations all around the world to help us locate and secure products globally and offer you the most competitive pricing and terms according to your delivery schedule. Even the most minor supply chain hiccup can produce a ripple effect of delays and withered profits.
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