chip shortage getting worse

Because of the chip shortage Toyota intends to cut 40% of global output in September. There is no clue as to what models will be cut or if the US will bear a proportionate share.

Just to give you an idea of how severe such a cut would be on the US, keep in mind that Toyota's 4 best selling models add up to over 60% of Toyota's sales in the first half of 2021. Toyota is the best selling brand in the US.


19.5% RAV4 - compact SUV
15.7% CAMRY - mid size car
13.7% COROLLA - compact car
12.7% HIGHLANDER - 3 row SUV that can seat at least 7 passengers

These 4 models are 61.6% of the total Toyota Sales in the US in first half of 2021
The remaining 38.4% consist of the other 13 models

12.3% TACOMA - small pickup
6.2% 4RUNNER - full size SUV
5.1% SIENNA - hubrid minivan
3.9% TUNDRA - large pickup
3.4% PRIUS - hybrid car
3.2% VENZA - new smaller hybrid SUV
2.2% C-HR - compact SUV
0.9% AVALON - full size car
0.4% SUPRA - BMW Z4 roadster sold to Toyota so they can develop their own body
0.4% SEQUOIA - Tundra based SUV
0.3% LAND CRUISER - Tundra based SUV
0.1% 86 (INCL FR-S) - Sports car made with Subaru
0.1% MIRAI - hydrogen fuel vehicle

there is something fishy about this chip shortage. Shortages don't last as long as this has, unless the supply side is artificially suppressed for some reason. Not usually anyway.

Quote: odiousgambit

there is something fishy about this chip shortage. Shortages don't last as long as this has, unless the supply side is artificially suppressed for some reason. Not usually anyway.

I agree. The official line is when the automakers cut back the chip makers "found other customers" but that is a lot of production going somewhere else.

Quote:

According to Acer, one of the world’s largest laptop manufacturers, companies will still be affected by this shortage until at least the first half of 2022.

Quote: odiousgambit

there is something fishy about this chip shortage. Shortages don't last as long as this has, unless the supply side is artificially suppressed for some reason. Not usually anyway.

Even more fishy
TSM stock has been struggling lately
You would think this is a sellers market for a chip manufacturer

Quote: terapined

Even more fishy
TSM stock has been struggling lately
You would think this is a sellers market for a chip manufacturer

The problem is with this shortage it is stimulating other to begin making them. It will be more competition for TSM in the future. The stock is probably looking longterm.

Quote: odiousgambit

there is something fishy about this chip shortage. Shortages don't last as long as this has, unless the supply side is artificially suppressed for some reason. Not usually anyway.

The downturn in vehicle sales in 2020 was about half as much as the downturn in 2007-2009 because of the economic crash. Yet the recovery beginning in 2010 didn't have as many supply shortages as today. Presumably back then the chip makes went and found other types of business.

One has to wonder if this is being done artificially as the automative manufacturing world gears up to a major upheaval as they switch to EVs. Automobiles have suffered from too much production capability for generations.

In the US the consumer demand for ever increasing size of residential vehicles and the fascination with horsepower is at increasing odds with government CAFE standards. I think that manufacturers want to eliminate the niche models and simply have a lineup based on a single platform which can be modified from compact to midsize, and will carry a sedan and different size SUVs. Toyota, for instance, got rid of it's subcompact, the Yaris, and it's full size sedan, the Avalon, so that most of their vehicles will be based on the Corolla and the Camry.

Personally, I don't see the consumer fascination with 6-8 passenger vehicles. You can put three children in the back of mid-sized vehicle, and very few families have more than 3 children.

The Kia Telluride is one of the hottest vehicles being sold right now.



In Mexico in every city there are private "Chevy Suburban" services that go where the buses do not go for about 2 to 3 times the price. From Oaxaca City to the beach was about 160 miles through the Sierra Madre Mountains (peaks at 12,000 feet). You could take an overnight first class bus that went around the mountains (10-12 hours) or a Chevy Suburban through the mountains in about 4 hours. But the mountain roads were so narrow and steep that tourists would often kiss the ground when they got out of the Suburban.

Quote: Pacomartin

Personally, I don't see the consumer fascination with 6-8 passenger vehicles. You can put three children in the back of mid-sized vehicle, and very few families have more than 3 children.

It is about the kids having friends they take along.

From what I have seen automakers will now have fewer cars on the lots, 50 day supply vs. former 80 days being normal. Now, they will boom again in 3-4 years same as they did in 2012 or so as there were no used cars from the crash in 2008 so people had to buy new.

Maybe we get some chip factories in the USA over this.

Quote: AZDuffman

Maybe we get some chip factories in the USA over this.

Definitely. I know Intel has already started planning to build some and others will too.

Quote: DRich

Definitely. I know Intel has already started planning to build some and others will too.

Intel is really the one that gave the industry away. 2 or 3 years to build a factory now even if they still have the technical know how.