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BOSCH WARNING OVER MICROCHIP FAMINE

Europe’s largest supplier of electronic and electrical components to automotive and motorcycle manufacturers has told its customers they will have to “put money on the table” if they want to beat current microchip shortages disrupting their output.

Speaking to the Financial Times at the opening of a new £860m Bosch semiconductor plant in Dresden, Bosch director Harald Krüger stressed that manufacturers can no longer make last-minute purchase decisions based on fluctuation in demand, given the long lead times in chip production.

“The only way to get out of the recent crisis is to have a different level of commitment,” said Krüger. “The commitment needs to be rock solid that parts will be bought with money on the table.” Effectively, he was signalling an end to just-in-time procurement as regards essential electronic components and a return to stockpiling.

Elsewhere, the FT reported that the spread of Covid-19 in Taiwanese electronics factories, a major hub of the global semiconductor supply chain, is likely to exacerbate chip shortages.

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