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Global Microchip Shortage Could Potentially Last Well Beyond 2021

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Back in February, Ford CEO Jim Farley said that he believed that the global microchip shortage, which has severely disrupted the automaker’s production for months, would be essentially over by Q3 of 2021. Others have echoed this sentiment, but as the weeks go by, it seems that expectations are changing. In fact, some now believe that the global microchip shortage could go on for years.

“I have been in this industry for 31 years, and this is a situation I have never experienced before,” president of the automotive division at Infineon Technologies, Peter Schiefer, told Automotive News. “This will not be sorted out in the next few weeks.”

“The latest incoming information suggests that production disruptions will be more severe than initially thought,” added LMC Automotive analyst James Norris. “The shortage is expected to drag on until the closing months of 2021 and undermine the capacity for automakers to catch up lost volumes in the second half.”

If these predictions come true, it’s expected that the automotive industry could see production cuts of up to two or three million vehicles this year across the entire globe. Ford recently saw cuts of 44,000 vehicles in just one week, as we recently reported.

Meanwhile, FoMoCo is rethinking its supply chain strategy in light of the chip shortage, focusing on stockpiling critical parts instead of sticking to a just-in-time philosophy. Jim Farley will also attend today’s White House summit, along with other major automaker executives and chipmakers, as the group attempts to find a solution for this ongoing issue.

In recent weeks, Ford has temporarily shut down a number of its production plants, suspended overtime, and most recently canceled summer shutdowns at most of its U.S. plants as it looks to make up for all of these production losses.

We’ll have more on the ongoing chip shortage and its impacts on Ford’s production soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

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Written by Brett Foote

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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6 Comments

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  1. 90% of our pharmaceuticals or their chemicals come from China, I’m sure our chips will soon follow, biden doesn’t think china can compete with the US…..hunter is doing okay with his china deal.. thing will continue to get worse.

      • HAHAHAHA! Nothing like presenting actual facts to support a non factually based argument!!!! Anyone reading your response can easily see, you are a political idiot, unable to present an argument with substance!

      • Yo, Brent: So being gaslighted by the Communist News Network is the woke thing to do? You sir are headed for personal disaster. And I’m not a Fox watcher.

        • You’re not a watcher/reader of facts, regardless of who or where they are presented! How about some facts to support your position (as wrong as it is). The presenting of facts is something the wokes do not like to do, as they can’t really justify hunter’s china deal (or his drug use) or his Ukrainian deal (funneeee how facts get in the way for those in love with hunter). The vast majority of chips are made in Taiwan and china (you know the “other” china-one china policy), not in the USA. I’m shocked that the wokes would like to have things made here, doesn’t sound woke.The next thing they’ll want is a strong pharmaceutical industry, here in the US! BTW, the chinese communists are building at least 60 New Chip mfg factories in china-the same guys that gave old hunter a billion dollars to “manage”.

  2. Hi
    What news if any do you have on the 2021 Ford Mustang GT. I placed an order on April 1/21 and have not heard anything. Is the chip problem a concern for the Mustang?
    Richard

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