There has been a recent issue of semiconductor shortages that have plagued the production of various products all over the world. It is not just the electronics that are facing the wrath of this but the automobile sector too. To which in the month of February there had been a lot of plants cutting down on production.
This was mostly due to the strain on chip supplies after the full-resumption of production. The chips are operating most of the functions in cars nowadays and the dependency on electronics has been tremendous over time. General Motors was one of such companies that were affected, for example, the production of Corvette was halted for half a month.
The issue still persists and there will be more shutdowns that are to appear. There are four factories that are affected, three plants of which are based in the US are already shut and one of them which is based in South America will be shut down next month. GM’s plants based in Fairfax, Kansas and Ingersoll in Ontario, Canada will be seeing such shutdowns extended until mid-April.
The cars that are affected due to these factories are Chevy Malibu, Cadillac XT4 and Chevrolet Equinox. The plant in Mexico will remain closed till the end of March which will affect Equinox, Chevrolet Trax and the GMC Terrain. And one of the GM plants in Sao Paulo, Brazil will also join the league through the month of May. So there’s quite a lot of cars that will face shortage and waiting periods.
There is a total estimate of 216,000 units that will face this shutting down issue. There are still some manufacturers that stay unaffected but most major manufacturers like GM, Stellantis, Mazda, and Ford are affected. The F-150 has also fallen into cut short-ing of production. An estimated cost of $2 billion will be affected in earnings of GM and Ford is predicting a loss of $2.5 billion.
Toyota and Hyundai are both stockpiling the chips due to the anticipated shortage. And this issue is predicted to still remain till the half of 2021 and Taiwanese companies are trying overtime to give slack to this issue. The summers could be really hard for the manufacturers.
The senate in the US government is trying to push this issue and resolve it as soon as possible. They are seeking to pull $37 billion dollars to the US chip manufacturing sector. But this won’t be solving any issue as immediate as this.