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Most automotive companies continue to experience shortages of critical parts and components, driven by supply chain issues since 2020. In an excellent article from Electronics Weekly, titled Auto chip shortage could be easing,” David Manners points to several signs the shortages of semiconductors may be behind us in the next year.

Causes of the chip shortages

From the article, here are some of the reasons for the global automotive shortages

Automotive manufacturers cut back on semiconductor orders severely at the beginning of the COVID-19 pandemic in early 2020. The auto companies were fearful of being stuck with excess inventories of cars if demand fell significantly due to the pandemic. When the automakers tried to increase orders, they had lost their place in line and were behind other industries such as PCs and smartphones.

Many automakers used a just-in-time ordering system to avoid excess inventories. This left them with almost no buffer inventories. Also, most semiconductors used in automotive are bought by the companies supplying the systems (engine controls, dashboard electronics, etc.) rather than the automakers, leading to a more complex supply chain.

Semiconductors used in automobile production have long design-in cycles and must be qualified; thus, it is difficult for an automaker to change suppliers in the short term.

The article looks at all the big automakers and their prospects for returning to full production; it also highlights what the semi-houses are doing to ramp up to meet demand. Learn more about how BPM manufactures all its systems in their ISO 9001:2015 certified plant located in Houston, Texas; find out how BPM makes device programming easy, fast, and affordable at bpmmicro.com/device-programmers.

Read Electronic Weekly Article

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