Ford India has become the latest to reduce its production amidst a shortage of semiconductors that run a number of functions in modern-day cars including tyre pressure monitoring, rain-sensing, parking assist, brake control, and more. The manufacturer of the popular Endeavour and EcoSport SUVs has shut its Chennai plant for a week. Mahindra too had said its production plans could be swayed as its supplier Bosch is enduring a shortage. Bosch is a major supplier of electronic control units to carmakers. Similarly, Ford Subaru Corp and Toyota have curtailed production in the US. Volkswagen, Honda, Nissan, and Fiat Chrysler Automobiles, too, have been affected.
The reason behind this is the vaulting demand for electronic items such as smartphones and laptops, leaving semiconductor manufacturers in a difficult situation. Also, chipmakers prefer consumer-electronics firms because their orders are larger and have better profit margins. With the demands linked to 5G adoption and China’s stockpiling of chips following the US sanctions, automakers are left stuck in a traffic jam.