Dec 2020

Microchip Shortage Threatens Industry

Carmakers and suppliers in China are warning that a shortage of automotive microchips is threatening to slow down the global industry’s pandemic recovery. Volkswagen and German suppliers Bosch and Continental, which cited tightening supplies of semiconductors and said bottlenecks could run into 2021. The industry is beginning to brace for impact as microchip prices rise and inventories dwindle.

Automakers in China were the first to feel the pinch partly because the world’s biggest auto market is recovering so rapidly from the pandemic — chipmakers simply can’t keep up with its rebound. But as North America and Europe bounce back, they may also come under pressure.

“We are aware of the increased demand for semiconductor microchips as the auto industry continues its global recovery,” General Motors said. “Our supply chain organization is working closely with the supply base to ensure adequate supply and mitigate any potential impacts.”