According to the Banco de México, Mexico’s central bank, stoppages in the nation’s automotive industry as a result of the global semiconductor chip shortage could cost Mexico up to 1% of the expected growth of the Gross Domestic Product (GDP) by the end of 2021.
The semiconductor shortage is hitting many industrial sectors hard, but the automotive industry has been hit much harder than others. This is because semiconductors are an indispensable component for auto manufacturers since they need them for a wide variety of in-vehicle systems such as security, navigation and entertainment. A combination of events such as the suspension of operations in factories and ports in Asia due to the pandemic and the increase in demand from the technology industry (especially cell phone companies, computers, and video game consoles) all led to a surplus of demand for this one component. This in turn has resulted in shortages in