Pandemic-fueled silicon chip shortages hurt car manufacturers
Updated 03:09, 06-Feb-2021
Patrick Atack


A shortage of certain silicon chips has shown the importance of the small parts of our world and economy, as some of the world's largest manufacturers have been forced to change or even stop production until more arrive. 

Car makers are at the forefront of the issue, as the chip "wafers" are used to make crucial semiconductors, which are in turn used in "microcontrollers" in vehicles – small devices that control internal car systems such as airbags or entertainment systems. 

Although the auto industry remains down on production due to COVID-19 and resulting supply issues, German auto parts supplier Robert Bosch said the "bottleneck" in semiconductor chips was becoming one of the biggest COVID-19-linked shortages.



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CGTN Europe spoke to Michelle Krebs, senior director of automotive relations for Cox Automotive in Detroit, U.S., to understand why the shortage occurred. 

"We had this shutdown because of the pandemic, so no one was making anything and it's taken a while to rebuild the pipeline," she explained. 

"The other thing is that nobody anticipated that car demand would return as quickly and dramatically as it has … they were caught shorthanded," Krebs added.


An example of the silicon 'wafers' that are used to make the semiconductor chips. /AP/Rick Bowmer

An example of the silicon 'wafers' that are used to make the semiconductor chips. /AP/Rick Bowmer


Another supplier of the crucial, yet tiny, devices said it was not a limited issue but was affecting the whole global supply chain for a full range of products that use the mini chips. 

"Semiconductor shortages are being felt in the overall automotive supply chain," the CEO of Infineon, Reinhard Ploss, told Reuters. 

Producers such as GM, Volkswagen, Ford, Subaru, Toyota, Nissan, Stellantis and Mazda have all reported supply issues and either cut back or halted production of some models. 

Krebs explained the supply issues are in part because of intensified competition for the silicon wafers. 

"Demand for things like computers, gaming systems, phones – all because we're working from home – has just skyrocketed, so there's this competition for chips," she told CGTN Europe. 

Swedish manufacturer Volvo, which is owned by Chinese firm Geely, said there is a "big risk" of supply chain issues reaching its European plants. 

Volkswagen said it plans to go directly to chip makers rather than rely on suppliers, such as German suppliers Robert Bosch and Continental. Volkswagen has threatened to sue its suppliers for not better managing the supply chain.

But despite the uneven effect of the silicon drought so far, Krebs is convinced no car maker will be unaffected. 

"You can't build a car without a computer chip," she said.

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