RE: Semiconductor shortage triggers JLR shutdown

[Cold]

VW have just announced a similar warning that chip supply issues are causing a shortage of completed cars. Last month, CEO Herbert Diess said the company has been unable to build 100,000 cars due to the shortage, adding the group would not be able to make up for the shortfall in 2021.

https://www.reuters.com/business/autos-transportat...

[PBCD]

camel_landy said:

Going into CV19, I believe the car manufacturers revised down, their requirements, which in turn released some capacity which was quickly snapped up to produce other products. However, now they want to increase the forecasts, they can't as there simply isn't the capacity... They just have to join the queue, like everyone else.

I'm staggered that car manufacturers didn't foresee this issue 12 months ago;
do they not realise that their usual 'just in time' supply chain approach is bound
to fail spectacularly during a pandemic when they try to ramp production back up?

[ACCYSTAN]

Are Vauxhall Ellesmere Port and Luton still closed due to semiconductor shortages?

[powerstroke]

What happened to Lucas ??? don't they make the electrics for Jaguars and land rovers anymore !!!

[jet_noise]

powerstroke said:

What happened to Lucas ??? don't they make the electrics for Jaguars and land rovers anymore !!!

Much of it has, through Varity & TRW, joined with ZF.
Your power steering could well be by them engineered in Birmingham.

Other bits still operate under different names.
The Lucas brand still exists for some aftermarket spares.

[cookie1600]

Scottie - NW said:

It's surprised me that Cisco switch and router supply has been hit so badly by this. Products normally on a few weeks lead time are now being quoted as 6 months, and these are for high end high profit devices.

Same with SBCs and SIP gateways, so many projects held up because of this.

https://www.bbc.co.uk/news/technology-56847518.amp

[kambites]

powerstroke said:

What happened to Lucas ??? don't they make the electrics for Jaguars and land rovers anymore !!!

Companies like Lucas don't make their own chips, it's all sub-contracted out to the far east. Not very many companies make their own chips because the setup costs are astronomical and the margins are so slim, that's rather the problem really.

As someone said above, the automotive manufacturers (and everyone else who uses chips in large quantities) have only themselves to blame really. They all had orders for their expected sales but then cancelled them because they thought demand would collapse. Production will ramp back up, but it's going to take time.

Edited by kambites on Sunday 25th April 09:17

[Galerion]

PBCD said:

I'm staggered that car manufacturers didn't foresee this issue 12 months ago;
do they not realise that their usual 'just in time' supply chain approach is bound
to fail spectacularly during a pandemic when they try to ramp production back up?

Toyota did but actually way sooner than 12 months ago. Just shows that the inventors of "just in time" production still have something to teach.

https://www.reuters.com/article/us-japan-fukushima...

[RDM]

Here’s hoping the semiconductor manufacturers go in to profiteering mode with these supply/demand issues, passing the profits on to their wafer fab employees.

(Can’t find an “aye that’ll be right “ emoji)

[Sheepshanks]

Galerion said:

PBCD said:

I'm staggered that car manufacturers didn't foresee this issue 12 months ago;
do they not realise that their usual 'just in time' supply chain approach is bound
to fail spectacularly during a pandemic when they try to ramp production back up?

Toyota did but actually way sooner than 12 months ago. Just shows that the inventors of "just in time" production still have something to teach.

https://www.reuters.com/article/us-japan-fukushima...

It's "just in time" in terms of parts required arriving at the assembly plant.

If you read that article, Toyota required suppliers (in the example it's Harman Audio) to keep 2-6months buffer - that may be finished units or it might be the parts necessary to assemble those audio units. It's Harman who is buying semiconductors and they have to make arrangements to support that buffer.

The snag at the moment is car manufacturers backed off their orders and forecasts and now there's no slack in the system to pick it back up again.

As well as that, some chip suppliers are not delivering even when they've committed to - because chip suppliers (generally) don't actually make the chips they sell. Over half the world's semiconductors (by value) are made by Taiwan's TSMC - if they (or one of the few other wafer fabs) don't supply the necessary wafers then everything along the supply chain is stuffed.

And it's all very well having 2-6mths buffer but many chip suppliers are sold out for the rest of this year, and beyond in some cases. Another snag is it might not be real demand - there's a lot of panic buying and over ordering, hence many suppliers have put customers on allocation to try and manage that.