A global semiconductor shortage is disrupting automotive production and may delay a recovery of new vehicle sales and profitability in the sector, according to Fitch Ratings. Increased demand for consumer electronics during lockdowns has led to the global microchip shortage, first reported in December.
Car makers are reducing output and selectively idling plants until the shortage eases, which we expect to take several months. Fitch says some automakers and suppliers may reconsider their supply chains, opting for greater vertical integration and localisation, which could require additional investments.
The situation is particularly acute for automotive companies, which are experiencing a strong increase in electric vehicle demand, while chip-makers often reserve supply for larger technology companies. The shortage is disrupting automotive production in most regions, leading to sporadic slowdowns and selective plant shutdowns, although the overall scale and magnitude of the problem is not yet known.
Fitch says it expects disruptions to continue for several months and to dissipate in H2 2021.
Latest News
-
Howden confirms Aston Lark acquisition
-
VIEW: Global supply chain losses “unquantifiable and unsustainable”
-
Flood insurance providers urged to register for new industry directory
-
Allianz: BI and recovery main causes of financial loss following ransomware attack
-
Canopius appoints group COO
-
Beazley launches Lloyd’s first ESG syndicate
Financial institutions were early adopters of cyber security and insurance. Are they still on top of the game?
Managing huge amounts of sensitive data online makes financial institutions a prime target for hackers. As such, the sector was an early cohort for insurers in creating cyber cover. Since then, the market has evolved almost beyond recognition. It continues to challenge itself to this day, complying with rigorous regulatory demands and implementing avant-garde enhancements to keep abreast of the ever-changing risks. Published June 2021
Manufacturing: An industry at risk amid great technological change
Of the many sectors of business, manufacturing companies are among the most at risk from cyber threats. How has the sector evolved to make it so vulnerable and what does the task of managing cyber exposure in a manufacturing company look like? CIR’s latest podcast with Tokio Marine HCC sought to answer all these questions and more. Published April 2021
© 2019 Perspective Publishing Privacy & Cookies
Recent Stories