By B.N. Frank
It wasn’t that long ago when cars and trucks were still being built WITHOUT computers inside them. Many of us remember driving those kinds of vehicles. Some may still be driving them. This being the case, cars do not need computers to operate. However, manufacturers no longer build cars and trucks without computers which is a shame because the computer chip shortage has slowed U.S. vehicle production.
Both CBS “60 Minutes” and “Full Measure with Sharyl Attkisson” recently featured segments about this and other substantial issues associated with chips:
From CBS “60 Minutes”:
Seventy-five percent of semiconductors, or microchips — the tiny operating brains in just about every modern device — are manufactured in Asia. Lesley Stahl talks with leading-edge chip manufacturers, TSMC and Intel, about the global chip shortage and the future of the industry.
Car companies across the globe have had to idle production and workers because of a shortage of semiconductors, often referred to as microchips or just chips. They’re the tiny operating brains inside just about any modern device, like smartphones, hospital ventilators or fighter jets. The pandemic has sent chip demand soaring unexpectedly, as we bought computers and electronics to work, study, and play from home. But while more and more chips are needed in the U.S., fewer and fewer are manufactured here.
Intel is the biggest American chipmaker. Its most advanced fabrication plant, or fab for short, is located outside Phoenix, Arizona. New CEO, Pat Gelsinger, invited us on a tour to see how incredibly complex the manufacturing process is.
First, we had to suit up to avoid contaminating the fab: head-cover – on; bunny suit – zipped; goggles; gloves… ready to go.
Lesley Stahl: I’m pristine!
Pat Gelsinger: Everything in this environment is controlled.
Together we stepped into a place with some of the most sophisticated new technology on Earth.
Lesley Stahl: I need to ask you why we’re all yellow?
Yellow filters remove light-rays that are harmful to the process. Overhead a computerized highway transports materials from one machine to the next. The process involves thousands of steps, where layer upon layer of microscopic circuitry is etched onto these silicon plates – that are then chopped up into chips that will end up in, say, your computer. Making just one can take six months.
Pat Gelsinger: You see, each one of these is a chip.
Lesley Stahl: Is a chip. I’m surprised. I thought chips were minute.
Pat Gelsinger: Well, each one of these chips has maybe a billion transistors on it.
From “Full Measure”:
A shortage in computer chips has gripped the auto industry in the U.S. and around the globe, with factories pausing and workers idled. It’s also impacting the industries that build smart phones, video games and all kinds of consumer electronics we use every day. Lisa Fletcher tells us what’s behind the mysterious computer chip crunch.
Despite repeated pandemic lockdowns, certain parts of the economy are doing far better than anyone expected this time last year – take the car industry
Sales have been on a steady rise since last summer. In the first quarter of this year, they’re up 8 percent compared to the same period last year. Good news for the major automakers, until that is, something unexpected started happening in January.
Across the country, factories belonging to Ford, General Motors, Toyota, and other major manufacturers started slowing down, not because of low demand but because key computer chips that are part of modern vehicles aren’t available.
In March and April of last year, auto sales collapsed, many factories were idled and automakers told their component suppliers to slow or stop deliveries for everything from shock absorbers to computer chips.
But auto sales rebounded far quicker than expected, and when the car companies tried to increase their orders of computer chips, they found their suppliers already overwhelmed by other requests.
Professor Brian Gibson is an expert on supply chains at Auburn University in Alabama.
Brian Gibson: They’re basically holding people to their original forecasts in their contracts and saying, “look, we just don’t have any more capacity. We’d love to serve your demand, but you told us demand was going to be here, and now you’re asking for us to take care of you here, and it just won’t work.
And the chip shortage goes far beyond vehicles. Laptops, computer gaming systems, TVs are all in high demand, and all rely on similar semiconductors used in computer chips.
Brian Gibson: You look at a lot of the things that we went out and bought during the pandemic. Some people had to buy a new computer for work because they had to work remotely, had to buy a webcam. I had a lot of challenges with students last Fall, last Spring with we need them to have webcams. Well, for two months it was hard to buy one anywhere, so they had tried to work around.
While the global car industry buys $37 billion worth of chips a year, electronics makers buy far more. Apple alone is estimated to spend $56 billion a year.
When Sony and Microsoft launched new versions of their popular gaming systems at the end of last year, it just added to the demand and the shortages. Creating what some have called a ‘perfect storm of supply and demand.
It’s become such a concern that in April the White House called a special semiconductor summit with CEOs from Intel, other tech companies, and major automakers. The president has included $50 billion for the semiconductor industry in his $2 trillion infrastructure plan.
President Biden: Chips’ like the one I have here, these chips, these wafers, batteries, broadband — it’s all infrastructure. This is infrastructure
US and Taiwanese companies are the largest makers of computer chips but a lot of the products that use them are assembled in China, which has been stockpiling some chips, increasing the shortages.
Brian Gibson: We become overly reliant on contract manufacturing and outsourcing of things like semiconductors and batteries, and things of that nature. So who knows, maybe you’ll have other organizations do the Elon Musk thing and say, “I’m going to create my own battery factories. I’m not going to be reliant on other people.”
Analysts say it could be next year or beyond before the supply of semiconductors meets demand. So until the makers catch up with demand, you can expect to continue to see shortages.
For Full Measure, I’m Lisa Fletcher.
Not discussed during either segment – ongoing warnings about computer vulnerability to cyberattacks or dangerously high levels of toxic Electronic Waste being added to landfills from modern tech devices that include computer chips (see 1, 2, 3, 4, 5).
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