The auto industry is struggling
to keep up the production as per the market demand owing to a major semiconductor
shortage. Increased demand for cars and electronic gadgets is widening the gap.
A global shortage of automotive
embedded electronics has disrupted production in the auto industry. Due to the
COVID-19 pandemic, the demand for gadgets and consumer electronics has
increased. Also, people are opting for private transport over public transport.
Presently, most car models use
multiple semiconductors for their infotainment systems, GPS systems, digital
speedometer displays, transmission systems, airbags, wipers and other such
processes and add-ons. This has resulted in an increased demand for
semiconductors in the automotive industry. The more expensive a car is, the
more semiconductors it needs.
The lack of huge inventories
and the sudden demand
for these semiconductors have led to a shortage.
According to Rajesh Goel, Senior
Vice-President and Director, Marketing and Sales, Honda Cars India, the lack of
semiconductors, procurement issues and logistic disruptions are impacting the
industry. He added that the brand is working hard to minimise the impact of
these in their production process.
Ford India, recently, halted
its production process because of the lack of semiconductors. A spokesperson
from the company mentioned that they expect the shortage to continue for the
first half of 2021.
Toyota Kirloskar Motors is
sailing through the situation without much impact as it could source semiconductors
from the parent company in Japan.
Apart from the automotive
industry, semiconductors are largely used in the production of computers,
gaming consoles and other gadgets. The supply of semiconductors is expected to
get stable by the Q2 of 2021.