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Component Shortage

Chips shortage limits auto production in Brazil and the rest of the world

“Never seen anything like it,” Tesla’s Elon Musk tweeted last month about the global chips shortage, “Fear of running out is causing every company to overorder – like the toilet paper shortage, but at epic scale.”

If you want a prime example of the chips shortage, look to Brazil.

In 2020, the automotive industry in Brazil was hit hard by chip shortages and the coronavirus pandemic. Approximately 1.61 million passenger cars were made in 2020, a decrease of over 34% compared to the following year. 

2021 got off to a flier… then grounded

2021 got off to a much better start for Brazil, with 1.14 million passenger cars leaving the production line in in the first half of the year, a 57.5% increase compared to the same period last year. However, production has hit a ceiling.

Brazil’s Association of Automotive Vehicle Manufacturers, ANFAVEA, has disclosed that because of chip shortages, Brazil missed its target for automotive production in the first half of 2021, and the numbers cited are startling.

According to ANFAVEA, some 100,000 to 120,000 passenger cars were prevented from entering production by the chips shortage. In June, only 166,947 passenger cars were made, the worst figures of any month in the last 12 months.

Manufacturing limitations created by the chips shortage have been compounded by the coronavirus pandemic. Brazil has seen 19.8m coronavirus cases with a 2.8% mortality rate, sadly resulting in over 500,000 deaths.

The biggest factories are struggling in Brazil

More than 20 plants in Brazil run by the likes of Volkswagen, Mercedes-Benz, General Motors, Nissan, Toyota, Renault, Volvo, Scania and Honda have shut down temporarily in 2021 because of the chips shortage and the pandemic.

At the beginning of June, Volkswagen halted operations at two Brazilian plants amid the chips shortage for 10 days. The company said, “A significant shortage of semiconductors is resulting in several supply bottlenecks.”

Then, in July, Hyundai Motor temporarily halted the operations of its Brazil plant due to the chips shortage. The closure was the first in the Piracicaba plant’s history, raising the alarm over chip shortages in the automotive sector.

What next for the Brazilian automotive sector?

Figures show that in the first half of 2021, the Brazilian automotive sector had a strong rebound on 2020. However, water has been thrown over the fire towards the middle of the year, due to chip shortages across the sector.

Local manufacturers expect to see some relief after August as manufacturing plants catch up, but manufacturers are uncertain about when the supply chain will normalise.

How’s morale among big companies? Sombre, to say the least.  

IBM says the chip shortage could last two years, while Intel Intel’s chief executive, Pat Gelsinger, thinks it could stretch into 2023.

Dell’s CEO echoes these sentiments, “The shortage will probably continue for a few years. Even if chip factories are built all over the world, it takes time.”

So, whichever way we look, and whichever experts we ask, the global chip shortage is showing no signs of abating. For Brazil’s auto manufacturers, making supply meet demand will be the biggest test of the last few decades.

Need Electronic Components?

When you need to source hard to find electronic components quickly because of allocation, long lead times, obsolescence, or quality issues, contact Cyclops Electronics for a fast response to your enquiries and a reliable on time delivery. Email Sales@cyclops-electronics.com or call 01904 415 415 today.

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Component Shortage Electronic Components

The Global Chip Shortage Has Created a New Problem: Counterfeits

The global chip shortage is officially wreaking havoc.

The world’s biggest carmakers, including Toyota and Volkswagen, have had to slow down vehicle production, and Samsung – who make their own chips – has had to delay the launch of several smartphones due to be released in 2021.

These are but a few examples of thousands of cases where the global chip shortage is wreaking havoc with manufacturers.

But that’s not all – the global chip shortage is creating a new problem: counterfeit components.

The issue is simple: chip manufacturers can’t make enough chips which has given counterfeiters a golden opportunity to plug the gap.

A counterfeit part is an unauthorised copy, imitation, substitute, or modification of an original component.

Counterfeit components are illegal and should not be used under any circumstances, but counterfeiters don’t care. They defraud you and hope you don’t notice. And if you do, there is virtually no chance of getting your money back. 

With no accountability, counterfeiters are having a field day.

A sophisticated criminal enterprise

The counterfeit electronic components industry is a multi-million pound industry. It has become sophisticated and impossible to shut down.

Criminals are taking advantage of weakened supply chains, inadequate quality control processes and inadequate reporting to flood the market with illegal components. They are praying on weaknesses and desperation to profit.

Counterfeit chips can look like the real thing, but worse still is they can also perform similarly during basic benchmarks and tests. This allows the most sophisticated components to penetrate manufacturing lines.

The risks of using counterfeit components include:

  • Financial loss
  • Reputational damage
  • Loss of customers
  • Refunds and regulatory fines
  • Bribery from criminals
  • Poor and dangerous product performance

How we can help you avoid counterfeits

We provide industry-leading chip testing to catch counterfeit goods. We have ISO 9001:2015 certification and ESD qualified staff. We have several anti-counterfeiting technologies available including a SENTRY machine, die testing and decapsulation testing.

We specialise in the procurement and delivery of electronic components for a wide variety of industries from the world’s leading manufacturers.

If you work with us as your electronic components distributor, you can avoid the issue of counterfeit chips and components for good. We have standard anti-counterfeiting policies and all the components we supply have a guarantee.

If you are still exploring your options, here’s some general advice:

  • If it is too good to be true, it probably is
  • Make sure any guarantee is worth the paper it is printed on
  • Look for ISO 9001:2015 certification
  • Demand testing prior to all deliveries
  • Only work with suppliers who have an anti-counterfeiting policy
  • Beware of spoof companies that pretend to be someone they are not
  • Consider staff training to identify when something isn’t right with suppliers

If you are concerned about counterfeit components in your supply chain we are happy to provide advice. Call us on 01904 415 415 for a chat with our experts. The chip shortage does not have to affect your supply chain with our help.