Auto production around the world has been hobbled by a shortage of microchips. Here’s what’s behind the shortfall:
- As the industry pulled away from the pandemic in mid-2020, chipmakers prepared for a more moderate recovery. But demand for vehicles jumped ahead of forecasts and chipmakers are found it tough to dial up production to keep pace.
- The ever-increasing electrification of cars and trucks is putting automakers into more direct competition for vehicle components with the likes of giant cellphone, computer and TV manufacturers.
- Now automakers and their parts suppliers are waiting in line behind Apple, Sony and Samsung.
- Until chip supplies are back to normal, automakers will be forced to pick and choose which models to favor and which to sacrifice.
