Global chip shortage hits Pakistani auto industry, Auto News, ET Auto

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Islamabad: A global shortage of semiconductor chips has affected car consumers and households in Pakistan, industry players say.

According to them, the lack of availability has also affected chip prices and delivery times, The Express Tribune reported.

South Korea, China and the United States have announced plans to fund semiconductor research and home-based manufacturing, according to media reports.

More and more countries are now making efforts to produce their own semiconductor chips, which are scarce in the world because “it is a matter of national security,” the Pakistani publication reported citing CNBC as quoting an Moody’s analyst this month.

In July, auto sales in China were affected as demand for semiconductors and commodity prices increased, straining the country’s economic recovery and weighing on world trade.

Passenger car sales in June fell 5.1% from a year earlier to 1.58 million vehicles, the Wall Street Journal reported citing the China Passenger Car Association.

The global chip shortage crisis emanated in mid-2020 when countries began to impose lockdowns to counter the spread of COVID-19. With more and more people staying and working from home, the demand for electronics and the computer chips they contain has exploded, according to The News International.

The shortage crisis worsened further due to a strong rebound in demand from the automotive industry in the second half of this year. Since then, the heavily overloaded semiconductor industry has struggled to keep pace with market demand of around 160 industries, he added.

Low vaccination rates and increasing infection rates in Southeast Asia are leading to the closure of factories assembling all types of semiconductors.


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