Published on 19 Jan 2022 on Zacks via Yahoo Finance
Chip Famine Shows No Signs of Abatement, Automakers in a Fix
It’s been a year since the auto industry has been mired in the global chip crunch. Mounting shortage of semiconductor supply threw the industry in disarray in 2021. Carmakers scrambled to procure chips, which forced them to undergo production cuts, idle factories and furlough employees. Chip crisis is expected to have cost automakers $210 billion in revenues in 2021. It seems like 2022 will be no different, if not worse.
Chip-Related Hiccups Continue for Auto Majors
The global chip deficit continues to cause disruptions, with auto biggies suspending operations at plants and cutting production targets. Yesterday, U.S. auto giant Ford F stated that it is idling the Flat Rock Assembly plant for a week amid supply-chain snarls. Japan’s #1 automaker Toyota TM announced yesterday that it is slashing the output target for the month of February by around 20%. The company acknowledges that is struggling to meet the surging demand owing to semiconductor shortfall and has adjusted its February production plan by around 150,000 units to 700,000 units globally. Next month, TM is suspending operations in Japan for several days across 11 lines in eight plants.