Chip shortage leads to Subaru temporarily closing plants in July


The chip shortage of 2021 is real, and many companies have been feeling the effects. Automakers have been hit particularly hard, and Subaru is the latest victim. The company plans on temporarily closing its plants in July 2021 to cope with the chip shortage.

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The plants being closed are located in Gunma Prefecture, located near Tokyo, Japan. The company has also said it may pull back production at its Kosai and Sagara plants located in Shizuoka, Japan. There are no solid dates for when this will occur, but Subaru is pivoting to adjust to the chip shortage.

According to USA Today, car dealers have been facing empty lots and a shortage of vehicles to offer prospective buyers. Some dealers are selling vehicles but have to put them on order for the customer, which means they must wait until the vehicle is built and delivered.

As with most things that use electronics, vehicles need microchips in order to operate. This chip shortage means new vehicles can’t be built. Here’s what USA Today reports on the shortage:

The chip shortage is a result of the COVID-19 pandemic. For starters, the pandemic increased demand for the personal electronics such as cellphones and laptops that chips enable, to the point where production could not keep pace with demand.

What’s more, in March 2020, the global pandemic prompted automakers, suppliers and car dealerships to close down. The economy went into a recession.

The automakers, which have experienced previous recessions, quickly canceled orders for parts with computer chips, thinking auto sales would nose-dive, said Michelle Krebs, executive analyst for Autotrader.

USA Today

Until chip manufactures can get back to normal production, it seems many products that require these tiny bits of silicon are going to be in short supply.

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