Semiconductor shortage hurting automobile production: Report

The global shortage of semiconductor chips is hurting automobile production and may impact August-Septembersales, even as demand is recovering well from the second wave of the pandemic, a report on Tuesdaysaid.

In August, the registration of passenger vehicles and tractors saw a 41-44 per cent uptick over the same period of 2019, and truck registrations are also improving despite a 15 per cent decline in the months over August 2019, financial services firm Jefferies said in its report. However, two-wheeler registrations fell 19 per cent in August over the same period of 2019, it said.

Noting that chip shortages are hurting production and should impact August-September wholesales, Jefferies said, "companies such as Maruti, Bajaj and Royal Enfield have seen an increased impact in the September quarter." The recent pandemic-related lockdown in Malaysia might add to the constraints, it added.

Semiconductors are silicon chips that cater to control and memory functions in products ranging from automobiles, computers and cell phones to various other electronic items. The shortage of such a crucial component has been impacting the automotive industry globally along with other industries, forcing them to cut down on production. The usage of semiconductors in the auto industry has gone up globally in recent times with new models coming with more and more electronic features such as bluetooth connectivity and driver-assist, navigation and hybrid-electric systems.