Chip Shortage to Cost Automakers $110 Billion in Revenues in 2021

0

The global semiconductor chip shortage will cost automakers $110 billion in lost revenues this year, up from a prior estimate of $61 billion, consulting firm AlixPartners said, as it forecast the crisis will hit the production of 3.9 million vehicles.

The chip crunch has driven home the need for automakers to be “proactive” right now, and create “supply-chain resiliency” longer term to avoid disruptions in the future, the firm said on Friday.

Automakers have in the past had direct supply agreements with producers of certain raw materials, including precious metals such as palladium and platinum, used in exhaust scrubbing systems.

Loading...

The more direct approach to securing precious metal supplies was launched after a supply and price disruption in that market.

Automakers are now looking at developing direct relationships with semiconductor makers, said Mark Wakefield, co-leader of AlixPartners’ global automotive practice.

“These things are shocked into existence,” he said.

Loading...

Automakers have been reluctant in the past to make long term commitments to buy semiconductors or other raw materials and take on the financial liabilities for such agreements, Wakefield said.

Now, “the risk is real. It’s not a potential” risk of losing production to semiconductor shortages, he added.

Separately, Ford Motor Co said on Thursday it is redesigning automotive parts to use more accessible chips, in response to the global semiconductor shortage.

Loading...

© Thomson Reuters 2021

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Loading...

Amazon Launches In-App miniTV Video Streaming Platform in India With Curated Web Series, Tech Videos, More

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

Loading...

For all the latest Technology News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Loading...
Denial of responsibility! TechiLive.in is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment