Car makers in race for chips

Car makers in race for chips

Semiconductor supply running out

Workers inspect cars at a manufacturing plant in Prachin Buri. (File photo by Pattanapong Hirunard)
Workers inspect cars at a manufacturing plant in Prachin Buri. (File photo by Pattanapong Hirunard)

Domestic car manufacturers are racing to obtain semiconductors as result of a global chip shortage.

A crucial control centre of modern cars and electrical appliances, semiconductors are now in short supply in Thailand, intensifying competition among businesses to purchase them.

Factors for the recent global chip shortage range from increasing demand for electronic equipment as more people work from home during the pandemic; the growth in electric vehicles; as well as the US-China trade war, which has led to restrictions on chip imports from China.

According to the Federation of Thai Industries' (FTI) economic and academic data analytics unit, some car manufacturers in the US have already shut down or reduced their production. 

The chip shortage comes as importers and exporters are likewise struggling to deal with delivery delays owing to shipping container shortages.

The problems are especially burdensome for companies producing electrical appliances, said FTI vice-chairwoman Kanit Muangkrachang, who chairs the FTI's Electrical, Electronics, Telecommunications and Allied Industry Club.

The semiconductor shortage means more delays in the delivery time for microchips, which has risen from four to six months, according to the club.

Ms Kanit expects the chip shortage will only cause a short-term impact because chip manufacturers will eventually increase their production capacity.

However, the additional problem of container shortages at major ports requires urgent solutions as it not only causes shipping delays but also increases freight rates.

"Thai exporters are seeing their costs triple," said Ms Kanit. "Large firms may manage to handle the burden, but small- and medium-sized companies cannot afford to pay the additional expense."

Vocabulary

  • analytics (noun): the discovery and communication of meaningful patterns in large amounts of information - วิเคราะห์วิทยา
  • appliance: a machine or piece of equipment that you have in your home, for example a washing machine or refrigerator - เครื่องใช้
  • burdensome (adj.): causing worry, difficulty or hard work ที่เป็นภาระ, ยากลำบาก,ยุ่งยาก - ที่เป็นภาระ, ยากลำบาก,ยุ่งยาก
  • capacity: the amount of something that can be produced - ความสามารถในการ (ผลิต)
  • crucial (adj): extremely important because it effects the result of something - สำคัญยิ่ง
  • intensify (verb): to increase in degree or strength - ทำให้แรงขึ้น, ทำให้หนาแน่นขึ้น
  • microchip (noun): a very small piece of a material that is a semiconductor, used to carry a complicated electronic circuit - ชิ้นซิลิคอนขนาดเล็กที่เก็บแผงวงจรไฟฟ้า, ไมโครชิป, แผ่นชิป
  • restriction: a rule, action or situation that limits or controls someone or something - การจำกัด, การควบคุม
  • vehicle: a machine that you travel in or on, especially one with an engine that travels on roads, e.g., a car, bus, van, truck, etc. - ยานพาหนะ
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