Biden Says Global Semiconductor Shortage Improving

Government / Comments

Carmakers will soon be able to get back on schedule.

The global semiconductor chip shortage has been negatively affecting automakers far and wide. The Cadillac Escalade recently lost a key feature as a result of this, and Nissan has also taken hits from the shortage. But automakers and politicians alike have been trying to remedy the situation, with BMW cutting production costs and the US Senate investing tens of billions of dollars in domestic semiconductor chip manufacture. With all of these efforts going into the resolution of a single problem, it's probably no surprise that the Biden administration says that the signs of relief for the shortage are starting to show.

Stefani Reynolds/Bloomberg
CSPAN/Twitter

US Commerce Secretary Gina Raimondo, who has spearheaded the President's efforts to improve chip supply, has been brokering meetings between semiconductor manufacturers, their suppliers, and customers, which include automakers. According to senior officials, the meetings have helped ease distrust between the sides that was related to the automakers' orders versus the production and allocation numbers from the manufacturers. The good news is that all this has resulted in a gradual increase in supply for automakers. The administration has also worked with governments in Malaysia and Vietnam, pressuring them to deem semiconductor plants "critical", thus allowing these plants to remain open and continue at least some production following COVID-19 outbreaks.

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Rear Perspective Driving Cadillac
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According to Bloomberg, Raimondo says that, in recent weeks, Ford CEO Jim Farley and GM CEO Mary Barra have both told her that "they're starting to get a little bit more of what they need" and that the situation is "a little better." Interestingly, a Goldman Sachs analysis that was published last month predicted that the peak impact of the chip shortage would be felt in the second quarter and said that automotive production "should jump in July."

Despite the positive words from the administration, the efforts of other parties like Samsung, and the estimate from Goldman Sachs, production at various domestic auto plants has slowed or stopped due to the shortage. We hope that a real and permanent solution is on the horizon, but we're glad to hear that things are improving, slow as that may be happening.

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Ford
Ford
Source Credits: Bloomberg

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