Put an end on chip shortage!

The European Parliament introduced the results of the EU-US Trade and Technology Council on its plenary session on Thursday. Fidesz MEP Edina Tóth emphasized in her speech: it is of outmost importance that the EU and the United States of America seek for strengthened cooperation, hence, I welcome that among the EU-US Trade and Technology Council’s priorities there is an aim to put an end on chip shortage.

MEP Edina Tóth emphasized: one of the unexpected consequences of COVID-19 outbreak is the shortage in the semiconductor market, which has the biggest impact on automotive industry. Shortage of raw materials, which is necessary for chip production, significantly upsurges the cost of motor vehicles’ manufacture. “Global chip shortage entails sharp rise in vehicles prices, whereby consumers are its collateral losers: such situation will extremely burden their wallets”, added the Fidesz politician.

No easement is expected in the near future, as industry players are predicted to face serious shortcomings in the upcoming years. “I hope that the European Commission will act as soon as possible and will prepare its action plan taking into account shortage of raw materials and the interests of consumers”,  concluded MEP Edina Tóth.

Background: Key factor in chip shortage was the significant reductions in orders from semiconductor manufacturers as a consequence of lock-downs introduced to curb the COVID pandemic and drastic decline in car sales. At the same time, however, the manufacturers of consumer electronics, which already accounted for the largest share of the total market, have seen an increased demand for chips. With the lifting of restrictions, of course, there has also been a surge in the sale of vehicles, in the production of which semiconductors play a key role, especially at a time when everything is revolving around digitalization and electrification. Manufacturers although wanted to buy more and more chips as their production started up, their suppliers were unable to satisfy their increased demand.