Since 2020, the automotive industry has suffered from the shortage of semiconductors for the chips required by vehicle electrical systems. Challenged with such a shortage of components, the firms Nissan, Suzuki, and Mitsubishi stated that they would stop cars’ production or reduce it drastically during June.
The automaker Nissan proclaimed that it would cease manufacturing vehicles on the Japanese island of Kyushu on June 24, 25, and 28. It will also tentatively stop the production of some prototypes at its plant in Mexico.
“The global shortage of semiconductors concerns the distribution of spare parts in the automotive sector. As they are missing, Nissan is adjusting production and taking the inevitable choices to ensure that it recovers,” a Nissan spokeswoman quoted as Reuters.
For its part, Suzuki will stop assembly lines for three to nine days at its three factories in the Shizuoka region. According to two anonymous sources, the Japanese company does not want to make it public. A company spokesman said, “the plan is not verified,”
Meanwhile, Mitsubishi will cut production to 30,000 vehicles in June at five factories in Japan, Thailand, and Indonesia, anonymous sources reported to the agency.
The chip shortage is yet another outcome of the Covid-19 pandemic. During the lockdowns, the factories suspended their operations, which led to a delay in manufacturing semiconductors and chips.
At the same time, the demand for several electronic products that include chips amongst their components grew. As a result, customers began to spend more on video game consoles, computer components, and home entertainment appliances, fueling the chip shortage.
Last February, Elon Musk confirmed the temporary closure of a Tesla plant due to a shortage of electronic components.
What are chip semiconductors, and why are they vital in the automotive industry?
Despite what industry you are addressing about, semiconductors are a significant component in modern electronics. A single-chip uses thousands, millions, or even billions of semiconductors on a single chip.
Experts cited by Bloomberg demonstrate that a semiconductor is very tricky to build a minimal: five-hundredths the size of a human hair. On average, it takes more than three months to make a chip and requires huge facilities, dust-free rooms, million-dollar machines, lasers, and molten tin.
Technologically advanced automobiles use hundreds of sensors and controllers that rely on chips to perform. Hence, if there are no semiconductors, there are no chips. Consequently, next-generation vehicles are not manufactured.
Intel stated that it intends to spend 20,000 million dollars in two new chip factories in Arizona, United States. It also notified that it could also establish a plant in Europe if it gets public financing.
For his part, Wenzhe Zhao, director of global economies and strategy at Credit Suisse, concludes that semiconductor production could recover to pre-pandemic levels by 2022. Nevertheless, in statements collected by the Russian agency Sputnik, the expert said that it could not do a lot to address the prevailing shortage besides resolving queue orders, production schedules, and prices.