The semi-conductor chip shortages aren't a new topic of conversation, but we'll still hear about it for awhile longer.
Semi-conductor chip manufactures are saying supply will not meet demand for another two years, or until 2023, and the Auto Industry will continue to feel the effects of this shortage through the end of the year.
Semi-conductor chips aren't just in cars; they are in almost everything from computers to gaming systems to even smart toasters and toothbrushes. So why is this affecting the Automotive Industry more than any other industry?
In early 2020 when COVID-19 forced manufacturing plants to shutdown in the United States, automotive makers like Ford and General Motors canceled their future semi-conductor chip orders, not expecting production to pick up later in the year.
Canceled orders were then reassigned to various technology companies whose demand for chips had increased - computer suppliers and smart phone makers suddenly had to supply their products to the workforce now working from home and away from their desktops in the traditional office setting.
When the Automotive plants' production picked up, auto makers needed to re-order their canceled semi-conductor chips, and chip suppliers couldn't respond fast enough.
These chips are all made to order - you won't find any chips laying around in storage in supplier's manufacturing sites.
Shortages have forced many auto makers to shutdown their plants for weeks or months at a time. With no chips to put in their cars, it completely shuts down production. Ford said because of less production, they will cut their input by an estimated 1.1 million cars this year, or a total of $2.5 billion in sales.
For Dominion, this means frustratingly rearranging shipments and installments of our machines into our customer's plants and working around their downtimes. Plant downtimes will continue at least through July for our customers.