The global shortage of semiconductor chips has had a well-reported adverse impact on auto makers, but manufacturers of goods from consumer electronics to solar power to self-propelled vacuums have also been hard hit, according to recent reporting by Fierce Electronics.
The report, published last June, attributes the COVID-19 pandemic, demand outpacing supply and political sanctions for the shortage of electronic parts including sensors and semiconductors. Fierce Electronics' report listed auto, consumer electronics, LEDs and lighting fixtures, and renewable energy equipment such as turbines and solar panels as the industries most impacted by the shortage.
"Unfortunately, some of the most significant economic sectors are taking the brunt of the problem," Fierce Electronics reported, "and the negative implications can be staggering and devastating."
Consumer Reports (CR) states the chip shortage is "wreaking havoc" on the auto industry. Benjamin Preston writes in the CR article the shortage has caused production delays and even shutdowns, and that despite the high buyer demand, 1.7 million fewer vehicles were made in 2021 than in 2019, the last full year of production before the pandemic.
Russia's war against Ukraine has further upended the production of the necessary electronic components by disrupting the global supply of neon gas, used to make semiconductors. Ukranian companies Ingas and Cryoin supply 45 percent to 54 percent of all semiconductor-grade neon gas, according to a report published by EDN.
Analysts don't expect the production setbacks to lessen anytime soon, either.
"It’s looking increasingly likely that vehicle supplies won’t return to something we might consider normal until the end of 2022 at the earliest," Sam Abuelsmid, an analyst at auto industry-tracker Guidehouse Insights, told Consumer Reports, "and possibly well into 2023,"
In order to keep autos moving to market, some automakers have temporarily stopped installing certain options such as heated seats. The optional features can be installed once the parts are available, according to the CR article.
Top executives from leading chipmakers met March 23 with lawmakers in both the Senate and in the Biden Administration, Politico reported at the time, to secure funding worth tens of billions of dollars. Bills in both the House and the Senate include $52 billion in subsidies for the U.S. production of semiconductors to help circumvent future breakdowns in global supply chains, Politico reports. The semiconductor industry is asking also for government to give tax breaks to companies that build chip-production plants in the U.S., Politico reports.
If the funding comes through, it will still take time for the chip shortage to be resolved; in the meantime, buyers who must get a new vehicle will be forced to deal with limited supply and high prices.
“It’s likely that car buyers will be paying more for new vehicles, at least through 2022 and perhaps longer,” Abuelsmid told CR.
