Ask The Editors: Honda ATV Shortage?
One of many feeling the squeeze.
Believe it or not, while Covid is partially responsible, there is a tiny little booger resulting in the holdup of manufacturing globally: The semiconductor.
Namely we are facing a huge shortage and it isn’t just the ATV segment feeling the pinch – everything from consumer electronics (have you tried getting the new PlayStaion or XBox?), automotive manufacturing, medical supplies- essentially anything that requires the flow of electrons to operate is in big trouble right now.
Why? Covid is certainly a factor as factories the world over aren’t working to capacity and shipping is a yet a disaster – the actual reason is a perfect storm of factors coming together at exactly the wrong time. It started last year even before the pandemic was in full swing. When the world went into lock-down last spring, auto and ATV demand plummeted as you’d expect so chip manufacturers focused on securing contracts in electronics and IT to stay afloat.
Then, in the third quarter, demand suddenly rebounded and the chip makers didn’t have the inventories to meet this swing.
Geopolitically, no favors were happening there either. Regulation from the US limited sales of semiconductors to Chinese technology manufacturing firms. China’s largest firm in the sector – Semiconductor Manufacturing International Corporation was actually blacklisted by the US Federal government.
As if all of this weren’t enough, a fire broke out over the summer at the Japanese plant that supplies most of the world with the fiberglass used to print circuit boards.
The shortage is expected to last into 2022. Honda may be the first ATV manufacturer observed feeling the affects of this global situation but it won’t be the last. Efforts by the US and China are underway to mitigate the problem as we speak but it still takes time before the results reach the consumer level.
