Supply Chain Issues Show Resiliency
The semiconductor industry continues to shift and throw companies for a loop. With increased demand and sales paired with a lack of supply and other supply chain issues, many struggle to keep up. However, success is still to be found. For more on the increase in sales, hardships for Ford, lockdowns, and more, see our industry update.
With the future still uncertain, what is the industry doing to combat lead times and overall recovery? Read on to learn more!
Q1 Semiconductor Sales Increase 23%
Semiconductor sales remain strong in the face of the uncertainty of the last two years. According to The Semiconductor Industry Association, or SIA, worldwide semiconductor sales for the first quarter of 2022 came to $151.7 billion. Compared to 2021’s first quarter, this brings and increase of 23.0%. In addition, March brought global sales of $50.6 billion. This is an increase of 1.1% from February. However, America wasn’t the only one to see an increase in sales. Compared to March, sales increased for Europe, Japan, Asia Pacific/All Other, and China.
Why Ford Loses Billions
Ford, a major player in the automotive industry, has certainly seen better days. The company reported losses of $3.1 billion in the first quarter. According to the company, the loss comes on the heels of an investment in an electric vehicle startup. To add to the troubles, the global shortage of semiconductors led to the limited availability of vehicles in North America. The semiconductor shortage has caused chaos for many industries, and the automotive industry is at the top of this list. Despite this, Ford touted their $2.3 billion pretax profit. Despite losses from their investment in Rivian, the company says they are still on track for meeting their “full-year target measure”.
Shanghai Lockdown Until Further Notice
More twists are in store for the supply chain as Shanghai deals with a complete lockdown. The lockdown, prompted by a rise in Covid-19, has been underway for six weeks. Though they hope to put an end to the lockdown by June 1st, the impact has been strongly felt by the economy. Many industries have suffered due to closures. From the hospitality industry to automotive, the lockdown has added extra weight. Shanghai, a notable location for the Semiconductor industry, accounts for roughly 20% to 25% of China’s sales. Notable firms including NXP, Nvidia, Unisoc and others are based in the area. This could potentially lengthen lead times for the next two years.
Despite a continuation of difficulties for the industry, resilience remains strong. With an increase in semiconductor sales, the future for the industry looks promising. As businesses navigate lockdowns and a lack of supplies, we know the partnerships made in the industry are a huge part of what keeps everyone going. Need help managing your supply chain needs? We are here to help, no matter what the market throws your way!