Name: The global chip shortage is slamming the auto industry
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The global chip shortage is slamming the auto industry

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Illustration: Aïda Amer/AxiosA global chip shortage has forced virtually every major automaker to halt some car production and furlough workers — just as the industry was showing signs of recovery from the pandemic-related shutdowns last spring.Why it matters: Fewer chips, fewer cars. Semiconductors are crucial components that make computer-controlled systems in cars work — everything from engines to power windows, as well as driver-assistance and navigation features.What's going on: Automakers needed fewer chips when the pandemic forced them to halt production. Chipmakers curbed production then ramped back up, though they still can't meet the industry's abrupt demand rebound.The list of chip shortage victims keeps growing: Ford is the latest, slashing production of its top money-making F-150 pickup trucks because of the limited supply of the key auto component. The company joins General Motors, Nissan, Volkswagen, Toyota, Mazda and Subaru in cutting production output — all citing the semiconductor shortage.By the numbers: The problem will result in nearly 700,000 fewer vehicles produced globally this quarter alone, according to new research from IHS Markit. It also said the problem might not let up until Q3.Between the lines: Major semiconductor suppliers, such as Taiwan-based Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) say they are investing to expand production, but that will take time. The bottom line: "Automakers cutting production now because of a chip supply bottleneck will cause a cascade of issues throughout the supply chain," Sam Abuelsamid, an analyst at Guidehouse Insights, tells Axios.Go deeper: President Joe Biden seized on January's Friday to argue for his $1.9 trillion relief package, while also bracing the public for the long road to a full economic recovery and robust job growth. Driving the news: January's unemployment rate dropped to 6.3% in Trump's last month in office, but the economy gained just 49,000 jobs. Ford plans to invest $22 billion in vehicle electrification through 2025, an amount that's nearly double its prior plans, the company said.Why it matters: The announcement is the latest sign of how the world's biggest carmakers are pouring more resources into tech that's still a tiny slice of the auto market.The last major economic datapoint of the Trump era is out. Driving the news: The economy ended the Trump years with an unemployment rate of 6.3%. That's a lot lower than the pandemic-induced high point of 14.8% in April, but still well above the 4.7% unemployment that Barack Obama left behind.

Illustration: Aïda Amer/AxiosA global chip shortage has forced virtually every major automaker to halt some car production and furlough workers — just as the industry was showing signs of recovery from the pandemic-related shutdowns last spring.Why it matters: Fewer chips, fewer cars. Semiconductors are crucial components that make computer-controlled systems in cars work — everything from engines to power windows, as well as driver-assistance and navigation features.What's going on: Automakers needed fewer chips when the pandemic forced them to halt production. Chipmakers curbed production...

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The global chip shortage is slamming the auto industry

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