Strong evidence for the ongoing microchip shortage hits hardest at dealerships where the continual absence of new cars and trucks presents a haunting scene of a third-world country.
“It’s a mess,” Ram CEO Mike Koval told Commercial Carrier Journal.
And it’s frustrating too for OEMs, fleets and consumers alike who were already in a historic holding pattern for these tiny components when Russia invaded Ukraine, a major supplier of neon gas used in semiconductor production. Russia, now a pariah nation that’s effectively cut off from the West, is a major supplier of palladium, another key element in chip production.
When asked about the impact of Russian-induced geopolitical tensions on the chip market, Koval didn’t blink.
“That’s making it worse,” he said.
Though semiconductor manufacturers reported stockpiling chip-making supplies before war broke out in Ukraine, those reserves are limited to roughly six months. Shifting to other supply sources can be tricky particularly when they’re allied with Russia.
“As significant amounts of Ukrainian production have been destroyed, other supply regions have to step in. This means China at the moment,” said Mark Thirsk, managing partner at Linx Consulting Group, an electronic materials research and consulting firm in Massachusetts. “We will see if supply continuity can be maintained, but the market for materials such as neon will be difficult in the second half of this year and may slow some chip production."
