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January 10, 2021

Global Chip Shortage May Delay New Car Launches, Cut Supply

A global shortage in computer microchips isn’t just affecting the launch of next-generation video game consoles like the PlayStation 5, PCs, and smartphones, they are now beginning to affect automotive production as well.

As global makers of semiconductors scaled back production in 2020, they now find themselves on the backfoot, trying to catch up to demand that’s rapidly ramping back up. Fueling the shortage further, chips used in smartphones and PCs have diverted deliveries away from automakers.

Moreover, a massive fire in October at a chip plant owned by Asahi Kasei Microdevices, a unit of Asahi Kasei in southern Japan, has also damaged semiconductor supply.

As a response, several global automakers have now issued warnings that they may have to slow down, or halt production temporarily.

Honda has had to reduce their output by 4,000 units at their Suzuka assembly plant, affecting mainly the all-new Fit hatchback

The timing isn’t too good for Nissan too which will have to reduce production of its recently launched Note hatchback. Production will be cut as much as 66 percent—5,000 units from 15,000 units.

The situation is the same at Suzuki, Toyota, and Subaru as well.

Elsewhere, Ford has had to idle production for seven days at its Louisville Assembly Plant which builds the Escape and Lincoln Corsair due to the same shortage.

In Europe, two of the largest automotive suppliers, Bosch and Continental are sounding the alarm over the matter, and have issued warnings to its clients. This will affect Volkswagen, BMW, and even Chinese brands such as GAC and Great Wall which imports 90 percent of its microchips.

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