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Published 10:08 am Thursday, August 25, 2022

At the beginning of the COVID-19 pandemic, news about the automotive industry focused largely on how consumers were not buying new cars and demand was way down, largely due to people staying home. However, over time, the big news on the automobile front was how semiconductor chip shortages were halting production lines and leading to unprecedented supply shortages — despite record demand. Semiconductor chips are found in laptops and other electronics, including vehicles. These industries have had to cut back on the number of items they produce as a result. In June 2022, Toyota announced it would be cutting its production quota in July by 50,000 units. Intel CEO Pat Gelsinger now expects the semiconductor industry to be impacted by shortages until 2024 due to a lack of manufacturing equipment. Other factors affecting chip production are limited access to purified neon gas, as Ukraine supplies 25 to 35 percent of this gas, as well as a lack of palladium, which is largely supplied by Russia. In addition, air transport costs continue to go up. Semiconductor chips control functions of touchscreens, braking systems, backup cameras, and even airbag deployment systems. Automobiles may even have chips in engines.