A shortage of everything from raw materials to chips and other essential components is affecting the automotive and electronics industries, but that's just the beginning. Suppliers in North America, Asia and Europe now face an even bigger problem - the increasing difficulty and cost of finding skilled workers to continue working in the industry when demand is rising for years.
The ongoing shortage of chips has strained the supply chain for many technology companies. However, there is a bigger problem for electronics manufacturers, as some of them are looking to hire to meet high consumer demand during the holiday quarter. About 80 percent of them say it has become difficult for their factories to find qualified workers. It has grown significantly over the past year. This trend is expected to continue until 2022. The time is unfortunate, because the demand for everything with chips inside is stronger than in previous years.
The organization has surveyed hundreds of suppliers from Asia, North America and Europe. Get a clearer picture of the electronics production value chain. It appears that two-thirds of US companies are struggling to find skilled labor, and European suppliers are similar. Meanwhile, only a third of Asian suppliers suffer from this problem, mainly due to lower labor costs and the relaxation of labor safety regulations.
This is not an easy task to solve, but nearly half of the organizations surveyed said they would retrain existing employees and offer more attractive compensation for the jobs they are looking for. However, the new Covid-19 outbreak has led to travel restrictions, particularly in Asia, allowing companies to attract more factory workers and engineering talent. It is interesting to note that 90% of all companies surveyed have significantly increased the cost of materials and components over the past year and reduced profit margins. The fluctuation is in line with this month's report that rare earth metal prices have risen in the past 12 months, which could drive up retail prices for all electronic components next year.
Automakers were the hardest hit among all customers of these suppliers. According to AlixPartners, the auto industry is likely to lose $210 billion in revenue this year, double the previous estimate released in May. Many automakers have been forced to cut production due to a lack of chips, which are expected to cost 7.7 million vehicles from their production target this year.
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Chip makers and electronics manufacturers can't find enough skilled workers