Explainer: Why is There a Global Chip Shortage and Why Should You Care?
News 18From delayed car deliveries to a supply shortfall in home appliances to costlier smartphones, businesses and consumers across the globe are facing the brunt of an unprecedented shortage in semiconductor microchips. General Motors Co and Ford Motor Co are among the big carmakers who said they would scale down production, joining other automakers including Volkswagen AG, Subaru Corp, Toyota Motor Corp and Nissan Motor Co. A shortage of auto semiconductor chips could impact nearly 1.3 million units of global light vehicle production in the first quarter, according to data firm IHS Markit. IHS said a fire at a Japanese chip-making factory owned by Renesas Electronics Corp, which accounts for 30 percent of the global market for microcontroller units used in cars, has worsened the situation. Apple’s major supplier Foxconn also warned of the chip shortage affecting supply chains to clients. The majority of chip production occurs in Asia currently, where major contract manufacturers such as Taiwan Semiconductor Manufacturing Co Ltd and Samsung handle production for hundreds of different chip companies.