Why Tiny Microchips Are Crippling The Global Auto Industry And Driving Up Prices
While the automotive industry was ravaged early on in the pandemic thanks to lockdown measures and a dramatic decrease in travel, it more recently has begun facing a new problem: a shortage of microchips. Microchips are vital to much of a vehicle’s key functions, such as engine control, transmission, infotainment systems, and more.
In the last half of 2020 and now in 2021, vehicle sales recovered fairly quickly, faster than automakers anticipated. Suddenly, they were struggling to meet demand. At the same time, chipmakers were experiencing supply shortages and increased demand from other sectors, such as personal electronics.
With the resulting lack of microchip supply, automakers have been forced to slow production, even on their most popular models. For several automakers, the shortage is expected to cost them $1 billion or more — and even still, the alternatives are worryingly few.
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Why Tiny Microchips Are Crippling The Global Auto Industry And Driving Up Prices
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In the last half of 2020 and now in 2021, vehicle sales recovered fairly quickly, faster than automakers anticipated. Suddenly, they were struggling to meet demand. At the same time, chipmakers were experiencing supply shortages and increased demand from other sectors, such as personal electronics.
With the resulting lack of microchip supply, automakers have been forced to slow production, even on their most popular models. For several automakers, the shortage is expected to cost them $1 billion or more — and even still, the alternatives are worryingly few.
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic
About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
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Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC
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Why Tiny Microchips Are Crippling The Global Auto Industry And Driving Up Prices
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