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Chip shortage is forcing automakers to skip some high-end features

(Bloomberg) – When automakers were first hit by a chip shortage late last year, they tried to idle factories until the problems subsided. But with the crisis reaching its fifth month and worsening, they are getting creative to push at least part of production forward. Nissan is leaving navigation systems on thousands of vehicles that would typically have them due to the shortage. . Ram no longer offers its 1,500 microphones with a standard “smart” rearview mirror that monitors blind spots. Renault has stopped offering an oversized digital display behind the wheel of its Arkana SUV – also to save on chips. The crisis is a landmark test for the century-old auto industry just as it tries to accelerate the shift to electric more smart. Vehicles. For decades, automakers have made steady progress to include more and better advanced features; now they are removing some – at least temporarily – to save their sales, underscoring the depth of the problems facing the industry. Last week, BMW AG, Honda Motor Co. and Ford Motor Co. all reported worsening problems due to chip shortages. Failure to secure critical supplies is a massive short-term setback – millions of vehicle sales will be lost this year – and does not bode well for the future as competition from internet and consumer electronics companies grows. cutting edge technology is intensifying. worse before it gets better, ”said Stacy Rasgon, who covers the semiconductor industry for Sanford C. Bernstein. “Getting that ability online just takes a long time.” Kurt Sievers, CEO of NXP Semiconductor NV, said the shift to electric vehicles is happening faster than expected, which has increased the growing demand for automotive chips. NXP plans to ship at least 20% more auto chips by revenue in H1 2021 compared to H1 2019, even though auto production fell around 10% over the period, he said. he declares. Manufacturing Co., warned that the crisis was far from over. His company, which is the world’s most advanced chipmaker and will play a pivotal role in any resolution, will begin meeting minimum automotive customer requirements by June, but expects automotive chip shortages. last until early 2022, he said in an interview with CBS. The automakers cannot wait. One reaction to the shortage is to allocate scarce components to more profitable and better-selling vehicles at the expense of other models – something manufacturers like Renault SA and Nissan Motor Co. of Japan are doing. . Peugeot is reverting to old-fashioned analog speedometers for its 308 sedans, rather than using digital versions that require hard-to-find chips. General Motors Co. said it has built Chevrolet Silverado pickup trucks without some fuel economy module, which costs drivers about 1 mile per gallon. Nissan is cutting the number of vehicles with preinstalled navigation systems by about a third, according to someone familiar with the matter. Why can’t we just make more chips? Automakers to warn of an impending shortage, are also prioritizing the supply of chips to the two best-selling models in each major market, the person said. In one case, Nissan transported chips from India to the United States on a chartered cargo flight to help move production there. A Nissan representative declined to comment: Buyers of Renault’s sporty Arkana now have to settle for a smaller screen without a navigation map and forgo the option of an induction phone charger. Group – Changed the Ram 1500 pickup so that the digital rearview mirror that usually comes standard is now only available as an upgrade option, according to a person familiar with the matter. The manufacturer also uses parts that don’t require chips from its more basic Ram Classic truck to keep the more expensive version down the assembly line. day to minimize the impact on our vehicles so that we can build the most demanded products possible, ”spokeswoman Jodi Tinson said in an email. pandemic and limited chip manufacturing capacity, but it did. Worsened by shrinking cargo space available as the global economy recovers from Covid-19. When automakers can get orders, their chips often cannot be shipped, which is compounded by the fact that major automotive chip makers NXP, Infineon Technologies AG and Renesas Electronics Corp. represent only 40% of the supply, the remaining 60% divided between tens of thousands of small designers. These small players often lack the leverage to make their chips in foundries when capacity is limited.In at least one case, automakers are asking a large chipmaker to send microcontrollers that don’t meet standard specifications, said a person familiar with the subject. These substandard chips wouldn’t compromise safety essentials like brakes, the person said, but they could mean in-car entertainment or emissions monitoring systems are more likely to malfunction in extreme weather conditions. . rewrite the software to give them a new task, said Sig Huber, consultant at Conway MacKenzie and former purchasing manager at Fiat Chrysler. Tesla Inc. said last week it addressed the issues by contacting new semiconductor vendors and then quickly writing new firmware for those chips. Stellantis is working on further standardizing its vehicle lineup rather than having to use specific chips for certain models, said the chief financial officer. Richard Palmer said on a call with reporters this week: “More standardization and flexibility, which is essential when we have supply constraints,” he said. “We are managing the shortage.” Manufacturers are also stockpiling incomplete cars, or “build timid” in industry parlance, to keep production lines running. In Hamtramck, greater Detroit, an area stretching for several blocks is filled with Ford F-150 pickups without a few chips. General Motors said it is also stockpiling unfinished vehicles while waiting for semiconductors. Meanwhile, behind the scenes, car suppliers are making unusual efforts to try and secure the chips. A Stellantis partner called JVIS-USA LLC attempted to sue NXP in Michigan court in April as part of a Hail Mary attempt to get more tokens, but a judge denied its request. Automotive supplier Visteon Corp. reported that automakers could seek compensation because of the shortages. In Japan, Toyota Motor Corp. Chairman Akio Toyoda visited a factory in Renesas that had suffered a fire to speed up its return to production, but no relief is in sight, even with Apple Inc., which high specification iPhones and aggressive demands usually place it. at the front of the smart customer line, saying last week that he’s starting to feel the pinch. This can leave automakers wanting, even when chipmakers ultimately manage to increase capacity. “This could be a longer term problem,” said Anna-Marie Baisden, automotive analyst at Fitch Solutions. “It will only exacerbate as vehicles become technologically advanced and use more chips.” For more articles like this, please visit us at bloomberg.com Subscribe now to stay ahead with the most trusted source of business information. © 2021 Bloomberg LP


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Joan Ferguson

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