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Wednesday, November 29, 2023

An issue with chip supply?

Car manufacturers are also hit by the shortages in the supply of microchips, one very important electronic product that brings new and comfortable features in every new car.

The various reasons that affected the supply and logistics chain—lockdown due to Covid-19 in various major ports, lack of manpower, trade tensions, lack of raw materials, and even the rise of 5G technology in smart phones that create a huge need for microchips— have created havoc on all major car manufacturers.

Did you know that there are about 700 steps within a span of 14 weeks in order to produce those microchips in an assembly? Much of this is spent waiting for the fabrication of crystals for silicon wafers to grow. And much of these chips are being gobbled up by companies that are in the 5G technology (yes, the consumer electronics, especially those smart phone manufacturers).

The auto industry are said to be using around 5 to 10 percent of the total chip production around the world – Taiwan is the largest producer. But since many car manufacturers are slowly coming back to life after almost two years of stagnancy, they have to wait in a long line when ordering for the microchips since the world is undergoing the so-called “microchip supply shock.”

The world-leading car manufacturer Toyota, for example, has stopped taking orders for their much-sought Land Cruiser and RAV-4. And there are many other manufacturers with various eye-catching models following suit. Nissan is also hard-hit as its net profit for the last two quarters this year dipped to a whopping 60 percent compared to that of last year.

World experts said the microchip shortage problem is expected to go on not only for the next year but up to 2024. Well, that would be a grim picture to deal with.


It is very surprising that in spite of the decline in the sales of vehicles abroad, experts here believe that there will be a modest rebound as the country is expected a brisk sale in new and used cars for the next several months.

This is welcome news for the local vehicle manufacturers and dealers who are still reeling from the effect of several lockdowns brought about by the Covid-19 pandemic.

A big boost to this welcome news is the coming CAMPI Philippine International Motors Show, which is now on its eighth edition, slated this Aug. 15. Car enthusiasts and prospective buyers are expected to crowd the World Trade Center to see and even experience to drive all the new vehicles to be presented by the various participants.

A car event of this magnitude is really a crowd-drawer and an instant hit to all as consumer goods pertaining to cars and vehicle all at discounted and promotional prices are also being showcased left and right

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