How the semiconductor industry is dealing with a worldwide shortage

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In the news

Failing the target

Toyota Motor Comp. warned it expects to miss its fiscal-year target of assembling 9.7 million vehicles, as a persistent shortage of semiconductors and other parts weighs on the carmaker and its global rivals. The world’s biggest auto manufacturer said it will produce 800,000 units in November and suspend operations at several of its plants in Japan due to the impact of supply constraints. Of the total output, 550,000 vehicles will be exported and the rest will be for the domestic market. [Bloomberg]

New oil

The early days of the pandemic saw dealerships closing stores and laying off staff. They rushed then to embrace a full online sales experience, known in automotive as “digital retailing.” Then the chip shortages hit, causing a massive decline in new vehicle production. Interestingly, this resulted in some of the most profitable years for dealerships. [Forbes]

In focus of Engibex

Supply gap inspires new ideas

Suppliers started fighting to get even one piece of this equipment to keep their production units alive, especially the machine builders. A new kind of business came up in the market- salvaging old machines and stripping them piece by piece to acquire as many PLCs and associated hardware as possible.

Outside of the box

Siemens is the leading producer of PLCs and is the preferred choice by most manufacturers, especially automotive. One most commonly used models are the S7 1300 series costs, approximately, €400 and depends on resellers throughout Europe. Due to COVID and the shortage of semiconductors, PLC production was hit the big time but soon afterward, the Ukraine-Russia war made it hit rock-bottom. As a matter of fact, the lead time to order a PLC and receive it in hand is close to 14-16 months at the moment. Moreover, the cost of PLCs went as high as four times more. 

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Anastasia Hmyria

Marketing Specialist at Engibex