Electronics and Semiconductors

Chip shortage pushes lead times to 5 months for trucks

25 August 2021

Truck and trailer OEMs as well as telematics providers are still heavily impacted by the semiconductor shortage gripping the industry with no sign of improvement through 2021, according to new data from ABI Research.

The data indicates that order board will soon be extended to 2022 and equipment manufacturers are becoming limited in meeting all demand this year.

ABI Research said Taiwan Semiconductor Manufacturing Corp. (TSMC) expects strong demand and shortages to continue through 2022 and Intel is anticipating the shortage to continue for up to two years.

“Connectivity, security, and integration are key elements of commercial transport today,” said Susan Beardslee, principal analyst for supply chain management and logistics at ABI Research. “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.”

Recent moves by OEMs impacted by the chip shortage include:

  • Daimler issuing a warning about production delays.
  • Mack Trucks suspending some of its production over the last month.
  • Volvo Trucks warning of future disruptions to 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,” Beardslee said. “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.”

It isn’t just trucks that are hurting from the ongoing chip shortage impacting the supply chain, automotive OEMs are also having to put production on pause. Last month, Toyota, Ford, Volkswagen and Daimler all put out notices that it would halt production at one or more facilities for a short period of time. As the supply chain shows no signs of improving, further production issues may crop up.

The full research can be found in ABI’s Supply Chain Management and Logistics Quarterly Update.

To contact the author of this article, email PBrown@globalspec.com

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