They may be smaller than the size of a matchbox, but a global shortage of semiconductor chips — the electric circuits that are essential for vehicle manufacturing — has brought the automotive industry in the United States to a halt. Last week, General Motors announced it would shut down production at nearly all of its North American assembly plants due to a lack of available chips. Ford and Volkswagen are currently partially shut down, joining Subaru, Mercedes-Benz, Toyota, Nissan, and Stellantis, all of which have stopped assembly lines at some point over the past year.
Semiconductor chips are used in a number of products, from iPads to medical equipment. In vehicles, the electrical circuits control everything from in-car entertainment systems to battery management to driver assistance. Experts say the shortage is being driven by COVID-19 constraints on the supply system: an increased demand for electronics as people work and learn from home, combined with disruptions in production. Some, like Ganesh Moorthy, CEO of the circuits company Microchip Technology, argue the problem has been building for years, starting with tariffs in 2018.
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