Chip shortage causes massive delays

Chip shortage causes massive delays

Ordered a truck? You may wait five months to get it.

That’s the gloomy news that has emerged from global tech market advisory firm ABI Research. It reports that industry suppliers – from truck and trailer OEMs to commercial telematics providers – are continuing to feel the pain of delayed semiconductor shipments alongside rising growth opportunities.

It has warned that order delays will soon extend to 2022, indicating that the commercial transportation industry is facing significant semiconductor shortages through to at least the end of 2021.

TSMC, the world’s largest chip contractor, expects strong demand and potential shortages going into 2022, with Intel anticipating an industry squeeze for up to two years. 

“Connectivity, security and integration are key elements of commercial transport today. Upwards of 17 compute modules are needed for a heavy-duty vehicle, and everything from safety systems to engine control and telematics are impacted by these semiconductor delays,” explains Susan Beardslee, principal analyst, supply chain management and logistics at ABI Research.

Mack Trucks had to suspend some of its production over the last month; Daimler included a warning in its recent earnings report; and Volvo Trucks warned of future disruptions to its production.

“Despite continued shortages and delays, suppliers may have options to pivot to alternative products, confirm true demand, and in some cases, pass on the costs of increased demand and need for flexibility. Where this is not possible, new contractual agreements and terms may be needed to redistribute risk, finance needed equipment and adopt more integrated, real-time supply chain solutions,” says Beardslee.

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Focus on Transport

FOCUS on Transport and Logistics is one of the oldest and most respected transport and logistics publications in southern Africa.
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