The supply chain disruption of semiconductor chips affects all the auto repair shops in the USA. Yet, many auto repair workshop owners have found new supply chains with new vendors. We can thank it to the USA’s best garage invoice software.
If 2022 wasn’t bad enough, then it got even worse. According to the newest observations, there has been a shortage of semiconductor chips worldwide. Analysts say that this shortage will linger until the second half of 2022. Some even say that this can prolong up to 2023.
Although there have been many reasons, there has been a shortage of semiconductors globally. One reason is that the manufacturing numbers are insufficient. They are not enough quantities to deliver to the auto industry.
We can blame the lack of manufacturing resources of semiconductor chips on many issues. One reason is the active trade war between China and the USA. Before, China was the sole supplier of semiconductor chips to the USA.
Since their trade war has started, China has refused to export any more semiconductor chips to the USA. Thus, this war will prolong the shortage due to a disruptive supply chain between the two countries.
Another reason is the still-lingering effects of pandemics even in the current year. Even in the post-pandemic era, the virus still lingers among us. This factor limits resources and laborers in manufacturing plants in different parts of the world.
We’ll be looking at every factor directly or indirectly involved in the shortage of these semiconductor chips. So without any further delays, let’s dive deep into it!
The US-China Trade War
Since 2019, there has been an active trade war between the two countries, China and the USA. Since the arrival of Trump in the presidential office, he has waged war against all tech companies in China. China believes in its motto of “self-sufficiency” and plans to self-suffice its needs of semiconductor chips by 2030.
So, when Joe Biden arrived in the office, people were expecting a change in the USA’s approach. This approach included China’s biggest tech companies, including Huawei. Huawei is the leading semiconductor exporter throughout the world.
Yet, after recent interviews and rallies of Joe Biden, it does not seem like he is interested in restoring the trade chain between the two countries. Instead, the United States approached Taiwan, the second-largest producer of semiconductor chips worldwide. Yet, it was to no avail as Taiwan was already producing and exporting semiconductor chips worldwide at their full capacity.
United states suffered and are still suffering a significant loss in their economy. Their auto industry can not produce new vehicles for the general public. As a result, there has been a shortage of cars. Lack of cars on roads means less and less maintenance work for cars.
Because of lack of work, the auto repair industry is suffering one of its largest losses in decades. Technicians working in auto repair industries are tired of these issues. They are now pursuing their career in different field of work that matches their expertise.
Closure Of Semiconductor Manufacturing Plants
Being less of manufacturing resources is one thing. Shutting down the manufacturing plants is critical for the semiconductor market worldwide. Unfortunately, there have been many occurrences. These occurences caused the major manufacturing plants for semiconductor chips to shut down.
The Renesas Electricity Corporation is the biggest exporter of semiconductors. They export their chips to many known auto manufacturers. These companies include Nissan, Honda Etc. In the early months of 2021, the manufacturing plant based in Japan caught fire. It caused severe damage to its manufacturing equipment.
No human casualties occurred. The company did lose eleven of its major manufacturing units in the process. This loss put a great strain on semiconductor chip production worldwide. The plant halted all its operations.
The company said that the production might start within one month. However, it took them a bit more time than that to get their routine production back to normal.
Secondly, the plant in Austin, Texas, was shut down due to extreme weather conditions in winter. The winter storm affected a lot of people and their businesses. The semiconductor chips plant owned by Samsung also halted its production for over a month.
Steps Taken By The US Government To Improve Supply Demand
Although the U.S. is the largest player in the industry, it still depends on foreign markets and allies for growth. That’s why it’s so important that the US government put in place policies that encourage investment. Here are some of the things they’re doing:
1) The US government has implemented tax incentives for research and development.
2) The Semiconductor Research Corporation provides funding for R&D projects
Today, the US government is doing many things to help the semiconductor chip industry. It will make it more competitive with other developed countries. The government has dealt with an uprising and new semiconductor companies in Taiwan.
This deal should reduce the tariffs on imported semiconductor chips by 6% ober the next five years. This step will help the US semiconductor chip companies to reduce their costs. It will also help them be more competitive in the global market.
Using The Best Garage Invoice Software In The USA To Find New Supply Chains
In the current year of issues in 2022, find a good supply chain for your auto repair workshop. One of the reasons semiconductor chips are going through a shortage is that the supply chains are not operating.
Most of the supply chains are non-functional because of the COVID. Yet, supply chains are being torn apart by the shortage of semiconductor chips at plants as well.
But, with the help of the best garage invoice software in the US, we can safely say that it will change how you order through vendors. It will find the most active and best-reviewed supply chain with a trustworthy vendor to look for the best quality repair products.
Gone are the days when you had to visit the vendor, choose the best products and keep track of your inventory while making invoices. All these tasks now come to fruition in a matter of seconds with just a few clicks and taps.
