The global semiconductor shortage appears to be reaching a new 'crisis point' as automakers worldwide are shuttering production facilities due to the lack of chips. Even though global manufacturing is humming along, fueled by new demand, unprecedented fiscal and monetary support continues to exacerbate shortages.
The shortage initially began in early 2020 because of the virus-related downturn in the economy. Chip demand was diverted away from autos to household electronics due to heavy demand from people working at home during lockdowns. Further, winter storms in the US last month, plus a fire last week at Renesas Electronics Corp., one of the biggest makers of auto chips, had been compounding factors in the worsening shortage for car companies.
Ford Motor Co., Toyota Motor Corp., Volkswagen AG, and Honda Motor Co are some of the manufacturers that have recently announced their inability to source semiconductors components for vehicles has resulted in plant idles.