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Automakers Are Ditching High Tech Features Amidst Unprecedented Semi Shortage

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by Tyler Durden
Monday, May 10, 2021 - 05:45 AM

The ongoing semi chip crisis is starting to force the auto industry to strip some high tech features out of vehicles.

Automakers like Nissan are leaving navigation systems out of "thousands of vehicles" that would typically have them due to the shortage, according to a new report from Bloomberg. Dodge's Ram no longer offers its 1500 pickups with an "intelligent" rearview mirror. 

Similarly, Renault has stopped offering an oversized digital screen behind the steering wheel of its Arkana SUV. 

Peugeot is reverting back to analog speedometers for its 308 hatchbacks and General Motors said it was building Silverado pickups without a fuel-economy module that would necessitate chips. 

A Stellantis spokeswoman told Bloomberg: “Given the fluid nature of this complex issue, Stellantis employees across the enterprise are finding creative solutions every day to minimize the impact to our vehicles so we can build the most in-demand products as possible.”

Analysts seem to be in agreement that the shortage isn't going to let up anytime soon. Stacy Rasgon, who covers the semiconductor industry for Sanford C. Bernstein, told Bloomberg: “This probably gets worse before it gets better. It just takes a long time to bring this capacity online.”

"Millions" of vehicle sales will be lost this year as a result of the disruption, the report notes. 

The shift to EVs has also helped keep the pressure on demand for the chips, NXP Semiconductor NV Chief Executive Officer Kurt Sievers said. NXP is planning to ship 20% more auto chips by revenue in 1H 2021 compared to 1H 2019 - despite the fact that car production has dropped about 10% over the same period. 

Just yesterday we pointed out "thousands" of Ford trucks sitting along the highway in Kentucky, awaiting semi chips for completion of assembly. 

Recall, days ago, we noted that Stellantis said there would be "no end in sight" to the shortage and that the company was making changes to its lineup, including changing the dashboard of the Peugeot 308, to try and adapt to the crisis. 

Intel's CEO, speaking on 60 Minutes last Sunday night, said: “We have a couple of years until we catch up to this surging demand across every aspect of the business.” Days prior, we wrote that Morgan Stanley had also suggested the shortage could continue "well into 2022". 

Two weeks ago, Ford was the latest auto manufacturer to slash its expectations for full year production as a result of the shortage.

Prior to Ford's report, we wrote about how the chip shortage was becoming a self-fulfilling prophecy, due to a shortage of chipmaking equipment. In the days leading up to that report, we wrote that Taiwan Semiconductor was also warning that the global chip shortage may extend into next year.

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