Title: How Covid led to a $60 billion global chip shortage for automakers
Headings: How Covid led to a $60 billion global chip shortage for the auto industry
How Covid led to a $60 billion global chip shortage for the auto industry
Key Points
‘Knife fight’
Scrambling for chips
How did we get here?
A close up image of a CPU socket and motherboard laying on the table.

Content: In a public filing, the company said the impact of the shortage is “yet unknown,” saying an unavailability of any parts could impact production. Scrambling for chips
Automakers are scrambling to get supplies of the chips, which have extremely long lead times due to their complexity. The shortage is far down the supply chain, causing a ripple effect through the entire network. Some automakers, like GM and Ford, have confirmed plans to partially build products and store them until supplies for the vehicles become available. Others have said they may look to directly purchase the parts from smaller suppliers, cutting out much of the current supply chain. VIDEO
3:46
03:46
Ford CEO on the production impact of global chip shortages
Squawk on the Street
Research firm IHS Markit anticipates 672,000 fewer vehicles will be produced in the first quarter of 2021 due to the semiconductor shortage, including 250,000 units in the world’s largest vehicle market, China. Although major semiconductor suppliers such as Taiwan-based Taiwan Semiconductor Manufacturing and United Microelectronics have announced investment plans to increase production capacities, IHS says such plans will do little to nothing to relieve the short-term shortage. “Because the cause of these constraints is the result of increasing demand from OEMs and limited supply of semiconductors, it will not be resolved until both forces are aligned,” said Phil Amsrud, IHS Markit’s senior principal analyst for advanced driver-assistance systems, semiconductors and components. VIDEO
3:04
03:04
How the automotive chip shortage affects the supply chain
The Exchange
One of the automakers most affected is Ford. The company was forced to significantly cut production this week of its F-150 pickup, which is critically important to the company’s profits.