Chip Shortages Force Automakers To Slash Production

The global automotive industry is set to lose $110 billion in revenue in 2021,

The forecast is up by 81.5% from an initial forecast of $60.6 billion in late January. And that’s just one industry. 

Yes, the chip shortage is that serious. 

Increasingly tight supplies of microprocessors are idling auto factories at a time when the industry struggles to rebuild inventories. 

If you are one of those who are finally back in the market for a car, you would of course expect great deals. What do you find instead? Fewer inventories on dealer lots.

Just as when the government is asking us to spend, we find nothing to spend on. 

This week’s shutdown at the Ford SUV plant in Louisville, Kentucky, comes as Fiat Chrysler Automobiles halts production in Brampton, Ontario and one other site, also because of semiconductor shortages. 

Nissan is trimming production of its subcompact Note model in Japan and Volkswagen has been cutting back output at plants in the U.S., China and Europe.

Honda could face cuts due to chip supply shortages next month.Subaru said a factory in Japan will be halted for two days because of supply constraints and its Indiana plant will reduce output.

2021 Mercedes-Benz S-Class uses LCD panels for the instrument panel and the infotainment displays. Car companies are experiencing shortages of panels and the underlying processors that run them. 

Semiconductors used to operate today’s engines and transmissions to control emissions and fuel economy and improve performance and comfort.

Yes, modem chips are now installed in virtually every new vehicle. 

Why is there a chip shortage?

Production simply can’t keep up. That’s the bottomline. 

We don’t have enough manufacturers to increase the demand of chips and we are not mining enough gold. Gold is used in every chip. 

With more and more people staying home to work, and more and more companies seeing the benefits of allowing their employees to work from home, there will be a continuous increase in demand for devices and equipment that require chips. 

In each of those chips, we need gold. 

We certainly don’t want the chip shortage to continue. It will be better for our economy if this is resolved soon but we also need to recognize an opportunity for investors. 

High demand for gold and limited supply. That equates to an investment opportunity. Gold will rise and you don’t want to get left behind. 

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At Noble Gold Investments, we protect our clients financial futures by giving them a safe and easy way to invest in Gold and other Precious Metals. Whether it’s diversifying your portfolio with a Gold or Silver IRA, acquiring precious metals, or storing bullion in our Texas depository, our no-pressure agents can guide you through all the options available to you.

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