Today's automotive industry is one of the most complex and competitive industries in the world. It requires plenty of resources and effort to produce safe, reliable, and popular cars among drivers. To achieve these goals, manufacturers have turned to computer chips as their primary power source for creating an automobile's sophisticated systems. This post talks about the CPU shortage and how it's affecting automakers around the globe.
Events Leading Up to the Current Situation
The global shortage first occurred in 2017 when many major players in the industry started reporting that they were experiencing shortages of critical chip-making components. As a result, car companies started increasing their production capacity and investing heavily in manufacturing plants worldwide. In September 2018, chipmakers began experiencing production issues due to a lack of available silicon wafers. The shortage was caused by a flood of new automated production lines that still needed to be ready for full-scale production. However, this strategy did not help solve the problem. As new technology is always evolving and becoming more sophisticated over time, so too must be its components if it is to remain competitive in today’s marketplace. As such, there has been another significant surge in demand for this technology over recent months as brands like Tesla and General Motors continue ramping up their production efforts to meet consumer demand across North America and Europe.
Causes of Automotive Chip Shortage
Decrease in the Supply of Raw Materials
The automotive industry has a very high demand for chip material. The reason is that the current trend of automobile production is to reduce weight and increase fuel efficiency. In order to meet these requirements, it is necessary to use new technologies such as laser welding and vacuum arc welding. These technologies are more complex than conventional welding processes, which means that they require more materials. By 2023 the demand for this kind of material will reach 5 million tons per year. If there is no increase in production capacity or decrease in supply, then we can expect an increase in the price of this product by 20% annually.
Manufacturing defects are the most common cause of the shortage. Manufacturing defects can occur due to bad equipment, machine errors, software errors, or even human errors. The first thing done to solve a manufacturing defect is to collect all the available information about the issue and its cause. Commonly, a manufacturer might have bad quality control. That can lead to the production of defective parts. The quality control department tries to catch any product defects before they reach the market, but sometimes it fails to succeed in this task.