The demand for semiconductors is increasing with the increasing use of new technology in vehicles. Due to the lack of supply arising out of the Corona epidemic, companies making semiconductors have reduced production, due to which automobile companies around the world have to bear the brunt. Many automakers in India have spoken of a reduction in production due to semiconductor shortage.
Apart from Hyundai, companies like Mahindra, Renault and Maruti Suzuki have also reported reduction in production and long waiting period in the past. Hyundai has said that there has been some improvement in semiconductor supply in recent times. However, the company will keep an eye on the current global scenario including the prevailing geo-political situation as it may lead to new issues.
What are semiconductors
Semiconductors are electronic chips made from silicon. These help to control the current in the electronic circuits of cars. Cars today cannot be imagined without them. At present, all the cars available in the market use semiconductors. Cars cannot be made hi-tech without them.
Semiconductors are used in cars for display panels, navigation, lights, power steering and almost all automatic features. Due to the shortage of chips, there has been a huge shortage of semiconductors in the automobile industry, so cars are not being produced in the stipulated number.
Why Semiconductor Shortage Happened
There are hundreds of different types of circuits in a semiconductor chip. Right now the best quality chips are supplied by companies like Qualcomm Inc. and Intel Corp. However, the global corona epidemic has disrupted the supply of companies’ chips. Because of this these companies are not able to produce semiconductors as per the demand.
Apart from this, the demand for semiconductors has increased in electronic devices like smartphones, TVs, such, which chip manufacturing companies are not able to fulfill. Because of this, the price of some semiconductor chips used in cars has gone up. There has been an increase in the cost of display driver chips in cars, which are also used in the production of televisions, laptops, cars and aircraft.
Now recently there has also been a shortage of power management chips in the global market. It is also having a bad effect on the world economy. Due to this, companies like Ford Motor Company, Nishan Motor Company, Volkswagen AG etc. have to cut their production. According to an estimate, due to the lack of supply of this chip, the car industry in the world has lost $ 60 billion this year.