Shortage of Semiconductors: Barrier for Automotive 5G?

A global shortage of semiconductors is affecting the automotive and auto parts industries due to the high demand for computer equipment and telephones generated by the pandemic’s working from home dynamic, Oscar Albín, President of the National Auto Parts Association (INA), told Milenio. "We are facing an unusual shortage of semiconductors as a result of the pandemic. Making people around the world stay home led many to modernize their computer equipment and cell phones because it is how they communicate with the rest of the world. Those who had one computer at home now need three or four,” said Albín. This is affecting automobiles because more and more vehicles are becoming “computers on wheels,” he added. However, he did warn that the impact in Mexico cannot be measured yet.

The shortage of semiconductors is affecting vehicles as they are increasingly adopting new technologies. Last year, GM announced the implementation of 5G in certain vehicles, reported MBN. GM announced that the Factory ZERO facility in Detroit will be the first automotive plant in the US to install a fixed 5G mobile network. The company expects to have "exponential increases" in both bandwidth and speed supporting the ongoing transformation of the plant.

What Is 5G?

Federico Hernández, Partner at Hogan Lovells puts it simply. “[It] is the fifth generation technology of wireless connectivity that will bring higher speeds, lower latency, more capacity and reliability, better quality and add new services to mobile devices and generally within an Internet of Things (IoT) or even an Internet of Everything (IoE) environment,” he wrote on an MBN article.

5G’s benefits are not limited to mobile providers. By increasing connectivity among different devices, this technology can streamline production in different sectors. For the automotive industry, 5G can pave the way for connected and autonomous vehicles. “5G will offer more than just higher connection speeds. It will also lower the cost per gigabyte significantly. This will allow an industrywide connection, which will be a strong platform for innovation. Many industries want to improve their networks and enable more automation,” said Elie Hanna, President of Ericsson Mexico, America and the Caribbean, in an interview with MBN.