Surging consumer demand in China, especially for cars, snapped back unexpectedly quickly

Car and electronic device manufacturers are sounding alarm bells over a global shortage of chips, which is causing manufacturing delays as consumer demand bounces back from the coronavirus crisis, reported Reuters.

Industry executives and analysts said that there are several contributing factors, including bulk-buying by US sanctions-hit Chinese tech giant Huawei, a fire at a Japanese chip plant, coronavirus lockdowns in Southeast Asia and a strike in France.

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More fundamentally, however, there has been under-investment in 8-inch chip manufacturing plants owned mostly by Asian firms, which means they have struggled to ramp up production as demand for 5G phones, laptops and cars picked up faster than expected, cited Reuters.

A source at a Japanese electronics component supplier said it was seeing shortages of WiFi and Bluetooth chips and was expecting delays of more than 10 weeks.

Consumer demand in China, especially for cars, has snapped back unexpectedly quickly from the coronavirus crisis, and orders for products such as laptops and mobile phones in regions still struggling with pandemic restrictions, such as Europe and the United States, have also picked up. Read more at i24