A worldwide shortage of computer chips is likely to persist for another 18 months, according to an Australian manufacturing company.
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The shortage of semiconductor computer chips had continued since 2020 when the Covid-19 was created.
Global manufacturers have effectively closed as the world has gone into blockchain only to reopen to a unique demand from electronics manufacturers and vehicle companies.
Last year, the local division of electronics manufacturer GPC – which makes equipment for New Zealand’s businesses in the mining, heavy construction, agritech and fleet management industries – was among those who felt the pain, but expected supply to run until early 2022. improve.
GPC Electronics NZ Limited General Manager Robert Wallis said this did not happen.
“What we are seeing is the lead times continue to extend and [for] some components increase the lead times around the year. That is not to say that it takes years for them to do it, but it is a point of allocation and priorities for who gets what.
He said supply will continue to be scarce until mid-2023.
GPC, which had factories in New Zealand, Australia and China, as well as a dedicated procurement team in China, was able to reduce the worst of the shortcomings by using the group’s purchasing power to secure more chips and printed circuit boards.
But carrying more inventory has come at a cost, Wallis said.
“What we find is that we buy the materials and 90 percent of them come in and maybe 10 percent will be hard to get. What that means is that we keep all the inventory that we could not complete.”
The cost of shipping also went up, and Wallis said the company had no choice but to pass on all the price increases to its customers because it was a contract business operating on tight margins.
The main message of Wallis for its customers was that they have to place orders much earlier in order to get them up to a specified expiration date.
The worldwide shortage of semiconductors has been particularly difficult for large vehicle manufacturers who rely on “logic” chips: these are basically the brains of our electronics and modern cars are increasingly relying on them.
Many of the major car companies have canceled their forward orders for chips by 2020 in anticipation of a sharp decline in demand. But when that did not happen, they did not succeed in recovering their orders and found themselves behind the line.
German carmaker Volkswagen said the chip crunch was partly why it sold two million fewer cars last year.
Toyota is the latest victim, announcing last week that it would reduce its home production target by as much as 20 percent for the June quarter because it could not get enough supply of the critical component.
However, a spokesman for the company said it would meet its 8.5 million vehicle production targets for the year.
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