The global shortage of chips that power modern gadgets and cars is disrupting the business plans of industries big and small.
Reliance Jio has delayed the launch of its recently-announced “ultra-affordable” smartphone the JioPhone Next, to be made in collaboration with Google, due to chip shortage.
The passenger car sales in India fell by 13.8% sequentially (against the previous month) in August as carmakers, choked by the lack of supply of semiconductors, slowed down production.
Major automakers, including Maruti Suzuki, Tata and Mahindra and Mahindra, had stalled production and/or cut work shifts due to the supply shortage, despite an expected boost in demand due to the festive season.
Global automakers, too, are hampered by the shortage. Toyota on Friday slashed its annual production target by 300,000 vehicles. American majors Ford and General Motors and German luxury carmaker Daimler, among others, too, have cut production.
Experts expect the shortage to run well into 2023, disrupting the economic recovery of several countries.
That is so as the conditions that caused the shortage are still in play: the rapid growth in cloud computing and the 5G rollout in major economies.
As per research firm IDC, computing and wireless industries make up over 50% of the global chip demand in value. The auto industry makes up less than 9%.
URL:https://auto.economictimes.indiatimes.com/news/auto-components/why-chip-shortage-is-playing-spoilsport/86133487
