Hyundai has not been badly affected by the global semiconductor shortage – here’s why
The global shortage of semiconductor chips caused by the Covid-19 pandemic has completely disrupted manufacturing in the automotive industry. Several automakers around the world have had to cut production due to the lack of these microchips. This has resulted in unusually long waiting times for several popular vehicles, which we often see here in India too. However, Hyundai seems to have avoided a similar fate so far. Here’s how!
The Hyundai Motor Group, including Thestarted stocking up on chips last year, while most other automakers started cutting chip orders in 2020 due to lower demand for new cars. In addition to continuing to order chips, Hyundai also accelerated purchases towards the end of the year. In a report by Analysts said past events that disrupted Hyundai’s supply chain and forced them to cease production have lost that more conservative approach to inventory levels, a departure from the automaker’s typical just-in-time approach.
“But sourcing has read the trend in the semiconductor industry to cut car chips production and said,” If we don’t buy them too, we’ll get into trouble later, “said a knowledgeable source, which made it possible for Hyundai not only to secure the microchips but also to buy them when they cheered, which allowed the company to keep production steady, as evidenced by the automaker’s home market remaining relatively strong during the 2020 pandemic.
Semiconductor chips are an essential part of a car’s electronics and the ECU. Without these chips, modern infotainment systems, driver aids and other important electronic components would not work at all. These important components cannot be manufactured and built into the cars without the chips. The global shortage of semiconductor chips has completely disrupted the automotive industry’s supply chain, severely affecting manufacturing around the world.
It is not only the automotive industry that has high demand for semiconductor chips. The auto industry also has to compete with other consumer electronics devices such as game consoles, ltops, desktops and tablets, which also require these semiconductor chips. This made the deficiency even more pronounced. Though the company has stated that there are no immediate disruptions to production, Hyundai and Kia chip shipments wouldn’t take forever. If the situation doesn’t ease soon enough, the shortage will hit Hyundai too.