As you might or might not be aware, there is a huge global semiconductor shortage going on right now. What is it and why should you care? Well, it doesn’t matter the field you belong to. With work from home being mandatory in these times of distress, there is a high chance you are using an electronic device to meet your daily workload. If you are associated with any sort of electronics, then you must be aware of the situation right now.
General Motors, the big American car giant, is one of the several companies hit with a dilemma. They make cars, sure, but modern cars rely too much on electronics. As such, they have decided to drop the ‘wireless charging’ feature from their SUVs due to chip shortage. That includes your new GMC Yukon, new Chevy Traverse, or Cadillac SUVs. What is it and how did it come to effect? Keep reading on to find out.
What is a chip or semiconductor?
Let us first know what a semiconductor is. Without going into too many scientific details, it is the thing which is used to make all the electronics we use today. Semiconductors are one of the biggest discoveries of mankind in recent history and are responsible for completely changing our world. Semiconductors are found inside your smartphones, inside your cars, inside your computers, and inside any gadget that you use.
Semiconductor chips are made from silicon or sand. Manufacturing chips from silicon is not an easy task and requires huge precautions and huge infrastructure. Any modern-day electronics cannot run without silicon. So, in a way, you can say that sand is responsible for the technological improvements of the world today.
Where are chips manufactured?
Semiconductor chips are manufactured inside specialized buildings or structures called “fabrication plants”, or “foundries”. There is a reason you won’t see foundries popping up everywhere. As previously mentioned, these chips are extremely difficult to manufacture and require highly specialized dust-free clean rooms. Even a grain of dust can ruin the entire chip. This is why semiconductor manufacturing is only done in a few foundries around the world. These plants are also pretty costly to maintain.
When it comes to Research and Development, the USA leads the way, with top semiconductor designs being laid out by some top companies. However, most of the chips in the world are actually manufactured in Taiwan. Today, there are three main firms that are the most advanced in creating semiconductor chips in their foundries – TSMC (Taiwan), Samsung (South Korea), and Intel (United States). You might have heard of these companies before. They are the leaders in the world of semiconductor manufacturing and business. If you want an electronic build, there are very few limited options you can choose from. It’s not an easy task.
What’s causing the shortage?
As you might have already guessed, the actual culprit is the pandemic that gave rise to this unforeseen event. Before the pandemic hit us, everything was fine. However, after the pandemic, the supply and demand chain got severely disrupted and that is the primary cause of this mess. With COVID-19 surging in 2020, there were a lot of restrictions imposed on the whole world. With lockdowns and limited people being allowed at work, semiconductor manufacturing got severely affected. Chip manufacturing is not something that can be completed by working from home, obviously. Because of this, the supply grew short.
Now, on the other side of the coin, the demand grew higher. With lockdowns being imposed and people being forced to work from homes, laptops and computers and other electronic goods became a thing of necessity, basically. As such, the demand just kept on growing. With more and more people being forced to work from home, the demand for electronics rose exponentially, all over the world.
But like we already mentioned, the manufacturing was not coming through. As a result, the supply shrank and the demand grew larger. This is why electronics started being priced way higher than their regular price and ultimately led to a global shortage.
Experts estimate that it might take well over 2022, for things to get back to normal. So, if you have been wanting that graphics card, you might not be having it anytime soon.
General Motors decided to skip wireless charging
A lot of industries were severely affected by this shortage and our beloved car industry did not escape it either. With cars being more and more reliant on electronics these days, it was foreseen. GM decided that they will be building certain midsize and full-size SUVs and they would be skipping the wireless charging feature.
A wireless charger, as you already know, can charge your phone wirelessly, provided that your phone supports it. Wireless chargers have become a much sought out luxury item in any luxury SUV or car. General Motors have decided not to halt their production because they cannot cope with the demand for wireless chargers, due to the chip shortage. Due to this, they have decided to skip this feature and keep the production line moving, which starts from this week.
GM is rushing their production to get cars to the dealerships. However, you cannot blame them. As already mentioned, the chip shortage will not be resolved anytime soon. Hence, without any further delay for a rather luxury add-on, GM would rather have the vehicles ready. A wireless charger is not a necessity in a vehicle, but just a luxury. GM spokesman Kevin Kelly has also mentioned that the SUVs without wireless chargers with a $75 MSRP credit.
Which vehicles will be affected?
The vehicles which will be emitting the wireless chargers include the 2021 model year Chevrolet Tahoe, Chevrolet Suburban; GMC Yukon, and Yukon XL. For the 2022 model years, more vehicles are affected, namely Cadillac XT5 and XT6 (being built at Spring Hill Assembly in Tennessee); Chevrolet Traverse (built at Lansing Delta Township Assembly); Buick Enclave (built at Lansing Delta Township Assembly).
What will GM do about this?
In order to overcome the chip shortage, GM has stated that they will be taking some other measures, especially to make sure the dough keeps rolling. In the month of June, GM started their work on the construction of four new vehicle stalls in the body shop area of Fort Wayne Assembly.
The Chevy Silverado and GMC Sierra are built at this stall. But these new extra stalls mean GM can now finish production on the other SUVs and trucks that are waiting for the chip shortage to stabilize. GM also prioritizes what semiconductor chips they will be using for the most important parts in the vehicles. They also said that they would do their best to meet the requirements for the in-demand products.