Home Global chip shortage puts car supply chain under the microscope
Global chip shortage puts car supply chain under the microscope
Severe shortage of key supplies risks becoming recurring crisis for motor industry
World Economy News
26 Jan 2021 • 5 min read
China’s car market staged a dazzling recovery in the second half of last year, but it has come at a heavy price.
The rebound has left companies including Volkswagen, General Motors and Honda facing a shortage in chips as a lockdown-driven boom in games consoles, laptops and televisions sends demand for semiconductors soaring and threatens to overwhelm chipmakers.
Fiat Chrysler was one of more than a dozen carmakers forced to idle plants this year as contract chipmakers in Taiwan and China were caught off guard by the multipronged surge in demand.
What’s new? The 2015 Iran nuclear deal has looked at best shaky since the Trump administration withdrew from it in 2018, imposing damaging economic sanctions on the Islamic Republic. In response, Tehran ramped up its nuclear activity in contravention of its obligations under the agreement. President-elect Joe Biden’s inauguration could mark an inflection point.
Why does it matter? Having failed to achieve its objectives, Trump’s “maximum pressure” strategy may be nearing an end. Restoring the nuclear deal, with its considerable non-proliferation benefits, could lead to wider U.S.-Iran diplomatic engagement. But one or both sides may be tempted to make additional demands, which would be a recipe for deadlock.