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General Motors Finally Has Good News on the Chip Shortage

When it comes to carmakers, the chip crisis had absolutely no mercy. More often than not, manufacturers were left with no other option than to suspend the production at some of their facilities simply because they didn’t have the necessary semiconductors to install on the vehicles they would have otherwise built.
GM is one of the carmakers hit hard by the lack of chips 6 photos
Photo: GM
GM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plant
Some of them, including General Motors itself, turned to all kinds of other approaches, including selling cars without specific non-critical systems.

This more or less worked, mainly because they managed to keep the production going. Still, as far as customers were concerned, this wasn’t necessarily the most convenient way to deal with the lack of semiconductors.

Now General Motors finally has some good news on this chip nightmare.

The company’s first-quarter profit managed to beat analysts’ estimates ($2.09 versus the estimated $1.68 per share), and CEO Mary Barra says the best is yet to come.

While admitting that the chip inventory is still fluctuating, Barra explained that the supply will improve substantially in the second half of the year. As a result, General Motors should be able to build up to 30 percent more vehicles in 2022 as compared to 2021, all thanks to this recovery in terms of chips.

Indeed, the consensus right now seems to point to a significant recovery in the second half of this year. The chip industry signals improvements in terms of global supply, not only as a result of increased capacity but also following dropping demand in some particular product categories.

For example, sales of smartphones and PCs are slowing down, and as a result, chipmakers can adjust their production accordingly and focus on the industries where the inventory continues to be tight. These include the automotive market, as carmakers continue to invest in new-generation vehicles, such as EVs and driving assistance systems that typically require a bigger number of chips to do their magic.
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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