‘Already Panic Buying’ Ford Worries About Looming Semiconductor Chip Shortage
Oh no, the automotive market could feel like 2020 again. Ford and other automakers have been preparing for a potential semiconductor chip shortage to prevent inventory shortages. The last thing we need is for used car prices to get even more expensive.
Ford warns about another semiconductor chip shortage
Back in 2020, inventory levels for new cars faced massive challenges. As a result, people had to buy used cars instead, driving up costs. The issues were caused by a semiconductor chip shortage brought on by the Covid-19 pandemic.
Suddenly, millions of people started working from home, so they purchased tons of electronic devices like laptops. This left the chips needed for electronics in cars, trucks, and SUVs in short supply.
Ford and other automakers such as Chevrolet, share that another shortage is looming due to AI data centers. Samsung, SK Hynix, and Micron are the biggest suppliers in the world.
According to The Drive, they have reallocated production capacity toward chips necessary to power AI data centers.
General Motors notes that the chips are needed to power infotainment screens, cameras, sensors, adaptive cruise control, fuel injection, and more.
A Counterpoint Research Analyst shares, “We are already seeing signs of panic buying within the auto sector.” In addition to having limited supplies, new tariffs are expected to increase prices.
Ford Chief Financial Officer Sherry House shares, “This is something we have been actively managing. We do believe at this point and time that we have a sufficient supply, but we are seeing pressure on pricing.”
Chevrolet has also been preparing to keep production running. During 2020, many automakers had to store incomplete models for months until more chips arrived.
