By on April 20, 2021

Subaru Legacy 2018 Logo Emblem Grille

Today’s update on the global semiconductor shortage involves Subaru, which recently announced that it would be suspending production at its plant in Indiana.  Lafayette’s Subaru of Indiana Automotive (SIA) will be idled through the end of April while the automaker waits for suppliers to catch up. It’s a situation we’ve seen numerous manufacturers forced into this year, with Ford arguably being the most relevant for the North American market. 

Those wishing for relief are in for a disappointment, too. Despite earlier assurances that the semiconductor shortage would ease over the summer, the likelihood of the industry’s chip-related hardships now looms larger than ever. Numerous industry groups are speculating that chips will be difficult to come by (especially in Western countries) through the end of the year, with the China Association of Automobile Manufacturers (CAAM) recently predicted that the shortage would actually worsen through 2021 before gradually returning to normal. Obviously, nobody can predict the future, but the present supply chains are in such a sorry state that it would be irresponsible to think they were on the cusp of a much-needed rebound.

Subaru’s announcement came on Tuesday, with the automaker explaining its need to idle SIA for the rest of April. The company estimated the number of vehicles lost at roughly 15,000 units. Based on how things have played out for other manufacturers, Subaru could easily see the shutdown extend into May. Though it’s hoping that won’t be necessary, adding that the recent fire at Japan’s Renesas Electronics played no factor in the decision.

Semiconductor chips have seen a massive uptick in demand over the last few years as increasingly more products require them and often in greater numbers than before. Cars use more of them than ever before but so do a lot of other devices that we’ve decided need to be perpetually connected to the internet. Smart devices are becoming all the rage in people’s homes and the pandemic resulted in a huge buy-up of computers, tablets, and other forms of digital entertainment while everyone has been locked indoors during the pandemic. Meanwhile, lockdowns handicapped just about every supply chain on the planet and setback component manufacturers dramatically.

We can’t even begin to assume when things will return to normal. But we do know that other shortages are about to become a serious problem, with rubber waiting on deck to become the next issue.

[Image: Subaru]

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10 Comments on “Chip Shortage: Subaru Shutting Down SIA Through April...”


  • avatar
    28-Cars-Later

    I am in Phoenix atm, there is a rental car shortage which no one has a good explanation for… I was fortunate to find a car on Turo not far from my hotel. Ironically dude offering the car is a big gearhead with a Viper in his garage, we BS’d for 45 minutes before I left. His thoughts were Hertz/Avis sold off their fleet last year in bankruptcy and now none of those companies can order enough cars because of the chip shortage.

    Additional: I predict this lasts through Q4 at the earliest as demand outstrips supply post plandemic.

    • 0 avatar
      Lorenzo

      The gearhead you talked to is right. Rental car agencies sold off most of their inventory when travel was curtailed, and now don’t have enough cars to service the increased travel levels, let alone normal levels. This is going to heavily impact travel throughout the year.

      The lockdowns initially devastated small businesses, but now the effect is trickling UP to large corporations. The lack of rental cars is now going to curtail airline travel, among other effects.

    • 0 avatar
      Rick T.

      I priced out a week on Hertz a few days ago. The cheapest for a week was almost $500.

      • 0 avatar
        28-Cars-Later

        Enterprise quoted me 6 something for some garbage wheels for a week on Sun, then screwed me twice (“call back at 2 we may have something”). This guy put out an MY20 Mustang convertible for $99/day and I got the cheap insurance @ 12/day. I’m grateful just to have wheels to leave this hotel. Oh and Uber wanted 70 dollars from the airport and 130 for an Uber black car (took a reg taxi for $60). Locals tell me Uber has been raping the city for a few weeks now.

  • avatar
    conundrum

    Just In Time supply theories and “efficient” markets have rocked the carmakers’ heels back as much as governments who were ready for a pandemic.

    Of course, it transpires that Toyota sussed all this out ahead of time and has plenty of these amorphous “chips” in stock. Breaking their own JIT rules in the interests of pragmatism, they had stockpiled “chips”, JIC. That’s Just In Case, their new business theory. Expect learned business textbooks on the subject soon.

  • avatar
    redapple

    CONUN….

    I believe you are correct.
    but.
    Odd that Subaru got caught with downed pants.
    Subaru and Toyota are like brothers – sisters.
    Shared lessons learned.
    Plants. (SIA made 35% of all USA Camrys from ? to 2015ish)
    Models (86 / brz. )

  • avatar
    JEFFSHADOW

    My 1975 Riviera runs well on the chips it carries, in this case, Wavy Lays.

  • avatar

    Welcome to the Europe after WWII: shortages of everything and total dependence on US of A. Today the West depends in everything on China.

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