Industry suppliers from truck and trailer OEMs to commercial telematics providers continue to feel the pain of delayed semiconductor shipments alongside rising growth opportunities. According to ABI Research, order boards will soon extend to 2022 indicating that the commercial transportation industry is facing significant semiconductor shortages through to at least the end of 2021. Telematics service providers must also confront demand stemming from 3G sunsets and the Canadian ELD Mandate. The equipment manufacturers are becoming limited in meeting all demand within 2021.
TSMC expects strong demand and potential shortages going into 2022, with Intel anticipating an industry squeeze for up to two years.
"Connectivity, security, and integration are key elements of commercial transport today. Upwards of 17 compute modules are needed for a heavy-duty vehicle and everything from safety systems to engine control and telematics are impacted by these semiconductor delays," said Susan Beardslee, principal analyst of supply chain management and logistics at ABI Research.
Mack Trucks had to suspend some of its production periodically over the last month, Daimler included a warning in its recent earnings report, and Volvo Trucks warned of future disruptions to their production. Telematics providers must determine how to address an estimated 650,000 devices remaining on 3G as of last quarter.
"Despite continued shortages and delays, suppliers may have options to pivot to alternative products, confirm true demand, and in some cases, pass on the costs of increased demand and need for flexibility," Beardslee continued. "Where this is not possible, new contractual agreements and terms may be needed to redistribute risk, finance needed equipment and adopt more integrated, real-time supply chain solutions."
