Semiconductor industry and market
In the chip shortage of around 2020-2021, why was automobile production heavily affected?
- ABecause cars use no semiconductors at all
- BBecause procurement of automotive chips could not keep up with sudden shifts in demand, and a car cannot be completed if even one part is missing
- CBecause car factories were converted into chip fabs
Show answer and explanation
Answer: B. Because procurement of automotive chips could not keep up with sudden shifts in demand, and a car cannot be completed if even one part is missing
Automakers temporarily cut orders as the pandemic spread, while demand for chips for PCs and the like surged with people at home, and the supply of automotive chips then could not keep up with recovering car demand. Because cars use many chips, a shortage of even one type halts production, and the importance of supply chains became widely recognized.
- A. Cars use many semiconductors.
- B. Correct. A shortage of even one part prevents completing a vehicle.
- C. Car factories were not converted into chip fabs.