CNBC: Major automakers fear the global chip shortage could persist for some time
Article published: 6 Sep, 2021
IB Economics syllabus: Microeconomics (demand and supply, shortage)
Partly due to coronavirus, many factories producing semiconductors have shut down in Malaysia. This has led to a huge shortage of chips, using silicon and consequantly has negatively affected car producers who use as many as 3000 chips in new electric vehicles. As the article states:
“The chip shortage has affected the automotive industry more than any other. Assembly lines have been shut down and some cars are now being shipped without features that rely on semiconductors.
In the U.K., car production plummeted to a new low in July, marking the worst July performance for the industry since 1956.”
This is yet another great article which points to the key concept of interdependence, especially that the shortage of chips will likely increase car prices as resource prices rise.
Source of image: Rebecca Cook | Reuters
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