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Ford, BMW and Honda cut production due to global chip crisis

The global chip shortage is going from bad to worse with automakers on three continents joining tech giants Apple Inc. and Samsung Electronics Co. in flagging production cuts and lost revenue from the crisis.

In the span of 12 hours, Ford in the US said the chip shortage could halve production in the current financial quarter; Japan’s Honda announced it will halt production at three domestic plants for five to six days next month; and BMW warned of delays at its facilities in Germany and England.

What started as a blip caused by factory shutdowns during the pandemic, has morphed into widespread disruption on the back of high demand for chips across other industries. Vehicles use semiconductors to power their advanced driver assistance systems, including anti-lock braking and parking assist. The more tech is squeezed into cars, the more chips they will inevitably require.

The crisis has also translated into longer waiting times for car buyers. According to The New York Times, Porsche has reportedly warned dealers in the US that customers might have to wait an extra 12 weeks to get their cars.

The news is hardly better for the tech industry. Coming off mammoth financial results, both Apple and Samsung have admitted the chip shortage will cause a significant impact in the near-term. Despite their push to make more in-house processors, the announcements underline Apple and Samsung’s reliance on a vast procurement network.

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