From Bloomberg’s “Chip Shortage Spirals Beyond Cars to Phones and Consoles” posted early Monday:
Auto and electronics makers that cut back drastically in the early days of the outbreak are now rushing to re-up orders, only to get turned away because chipmakers are stretched to the max supplying smartphone giants like Apple Inc.
This week, Qualcomm Inc.’s Cristiano Amon, head of the world’s largest mobile chipmaker, flagged shortages “across the board,” citing the industry’s reliance on just a handful of players in Asia…
Carmakers appear in direst straits and have spurred the U.S. and German governments to come to their aid — General Motors Co. this month was forced to mothball three North American plants and Ford Motor Co. is bracing for a 20% drop in near-term output.
But more industries have lately copped to shortages, emphasizing how Covid-19 and a boom in a new breed of 5G-ready smartphones like the iPhone 12 is exacerbating a shortage of capacity plaguing the entire consumer industry. Chip shortages are expected to wipe out $61 billion of sales for automakers alone, but the hit to the much larger electronics industry — while tough to quantify at this early stage — could be far larger.
My take: When the chips are down — and automakers are shuttering factories — will Apple’s massive cash flow and locked-up production capacity look like unfair advantages?