Updates
Later, 3:50 p.m. CT: from the Taipei Times. How did we end up with this chip shortage?
From India to China to the US, automakers cannot make vehicles — not that no one wants any, but because a more than US$450 billion industry for semiconductors got blindsided.
How did both sides end up here?
Over the past two weeks, automakers across the world have bemoaned the shortage of chips.
Germany’s Audi, owned by Volkswagen AG, would delay making some of its high-end vehicles because of what chief executive officer Markus Duesmann called a “massive” shortfall in an interview with the Financial Times.
The firm has furloughed more than 10,000 workers and reined in production.
Companies appear to have been off in their calculations that traditional auto production was all but coming to a halt, and that new-era vehicles were almost here.
In reality, talk of the death of the conventional auto industry has been premature. So were prospects around the technology upgrade that has been under way.
Yes, demand has been down and slowing, but we have been hovering around “peak auto” for a while, with global sales of 70 million to 80 million a year. They fell 15 percent to 66.8 million last year.
However, the expected onslaught of new-technology vehicles has not been as severe as the hype. Announcements of billions of dollars of investment covering electric to hydrogen and autonomous systems would have you believe that we have entered a new era of driving — or of being driven around. Yet electric and autonomous vehicles still account for only about 4 percent of all sales.
Later, 3:24 p.m. CT: This is not likely to be a short-lived problem. There is plenty of time for a new competitor to enter the field and challenge TSMC and Samsung. Chipmaking has a pretty high moat. From Automotive News, tight chip supplies could persist for as long as a decade. Wow.
China’s automotive-chip shortage could persist for as long as a decade, but it has little to do with the current supply glitches snarling production, according to the official who oversees the nation’s key new energy vehicle technology development platform.
Short-term factors like mistakes in ordering due to incorrect forecasts and factory disruptions because of Covid-19 will resolve naturally, Yuan Chengyin, general manager of the National New Energy Vehicle Technology Innovation Center, said.
Rather, China’s rising demand for electric cars, its lack of domestic technical knowhow and sustained geopolitical tensions will emerge as much more serious issues.
I've run out of fingers and toes to count all the auto manufacturers who have announced plans to market an EV in the next year or so.
Original Post
Late last night I posted two long notes about semiconductors and the shortage thereof. Here and here.
This morning surfing the business news, only two stories caught my attention. This was one of them, from Reuters: Germany urges Taiwan to help ease "auto chip" shortage.
How did Germany lose its way? Why wasn't Germany a leader in semiconductor manufacturing? It seems with Merkel's focus on opening Germany's borders to Turks and refugees and pivoting to renewable energy, Germany completely lost focus. But that's another story for another day.
Back to the "auto chip" shortage and the linked article:
- Automakers around the world are shutting assembly lines due to problems in the delivery of semiconductors, which in some cases have been exacerbated by the former Trump administration's actions against key Chinese chip factories.
- The shortage has affected Volkswagen, Ford Motor Co, Subaru Corp, Toyota Motor Corp, Nissan Motor Co, Fiat Chrysler Automobiles, and other car makers.
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For The Grandchildren
Our freshman granddaughter had a project assignment for her high school engineering class.
At 11:00 p.m. (2300 hours) she began working on it. By noon, the following day, 1200 hours, it was complete.
A child's toy.
This is a 6-cylinder ICE undulating snake. LOL. The head is to the right. It appears the snake swallowed a swan (look at the tail to the left).
She must have used an electric drill to drill the holes through which the rods move. The eight rods each sit on a steel nut. The undulating snake is made from clay.
An entrepreneur could package the parts and sell it as a kit.
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