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Automakers are scaling back vehicle production as chip shortages bite

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In brief: One of the many effects of the pandemic has been a chip shortage leaving consumers fighting over the few new consoles, graphics cards, and CPUs that arrive on the market. It’s a problem that extends beyond home electronics and PCs—the automotive industry has been hit hardest of all.

Ford is one of several automakers that has been forced to slow production of its vehicles due to the global semiconductor chip shortage—manufacture of its popular F-150 pickup trucks is being cut back at plants in Michigan and Missouri.

Ford also stopped all production in Kentucky last December, and this month issued a month-long pause at a German factory, notes Ars Technica.

Other companies have faced the same situation: GM, Audi, Honda, VW, Subaru, Toyota, Mazda, Nissan, and Stellantis (formed from the Fiat Chrysler/Peugeot merger) have all reduced or say they may reduce their output.

The pandemic is to blame for the vehicle industry’s state, though not how you might imagine. The first lockdowns saw car sales plummet last summer—by over 97 percent in the UK—leading to the temporary closure of vehicle manufacturing plants and showrooms. In response, chipmakers slowed down production of semiconductors for vehicles.

With many locations’ Covid-19 restrictions easing recently, demand for vehicles has rebounded stronger than expected. Car companies are now trying to ramp up production, but the chipmakers are busy fulfilling orders from other industries.

Semiconductor shortages are being felt far and wide. In its recent earnings reports, Sony warned that the situation means it is struggling to increase production of the PS5.

Image credit: Jenson, snapper8S8

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