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General Motors Has Found a Clever Way to Deal with the Lack of Chips

The global chip shortage may be here to stay in the long term, with some experts estimating it would continue well into 2023, but on the other hand, carmakers out there are always looking into ways to speed up the recovery and reduce the impact on their operations.
GM's Flint assembly plant 6 photos
GM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plant
While most of them turn to temporary shutdowns even of their best-selling models, others are replanning their supply chains in a way that makes more sense given the current crisis.

And General Motors is one of them, as the American giant plans to no longer rely on suppliers for the acquisition of chips but reach out directly to manufacturers in this regard.

In other words, GM hopes that by eliminating suppliers, it would establish a direct relationship with chipmakers to allow the company to get its hands on semiconductors much faster, therefore reducing any potential disruption that could eventually affect its production.

CEO Mary Barra admitted the global chip shortage wouldn’t just go away overnight, but at the end of the day, it’s all that she described as a “solvable problem.

General Motors has been hit hard by the lack of chips. The company turned to temporary shutdowns of some of its factories simply because it didn’t have enough semiconductors to install on the vehicles it made.

Furthermore, GM produced and sold some models without start-stop systems, this time in an attempt to reduce the number of chips that would be required for each vehicle.

A forecast released by market research firm IDC estimates the global chip shortage would be resolved next year, emphasizing there’s a risk of oversupply in 2023.

In other words, foundries across the world might invest so much in increasing their production that they would eventually end up building more chips than the industry needs, therefore creating a gigantic inventory without enough customers to help maintain the same pace of chip manufacturing.

 
 
 
 
 

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