Semiconductors are the key to new cars and a glut of them is proving costly to production.
Car manufacturing in the UK, which is starting to come on strong since closures last year, is up month on month, but is also showing howthe global semiconductor crisis is having a big effect on production around the world.
The latest production figures show just under 55,000 new cars were built there in May. However, manufacturing was up vastly on the same month last year, when Covid closed almost everything and just 5314 cars were built, but it is still less than half what it was in May 2019, when 116,035 when new cars were made.
It is more evidence of the hit the global semiconductor crisis is having. The Society of Motor Manufacturers and Traders has cited the global semiconductor crisis as a key reason for this relative decline in car manufacturing. Semiconductors are vital for modern cars, running everything from safety to infotainment systems, but a perfect storm has seen a chip shortage hit car makers worse than most businesses.
Automotive firms play third fiddle to the semiconductor-hungry IT and smartphone industries, who have seen vastly increased demand as huge swathes of populations have sought entertainment and work devices during various national lockdowns across the world. The electronics industries tend to be larger customers and are therefore often higher priorities for semiconductor firms, who have themselves been hit by pandemic pressures.