No chips, no worries as road vehicle imports defy semi-conductor drought

The worldwide shortage of semi-conductors is causing chaos in the manufacture of a number of popular electronic products including smartphones and laptops but car makers appear worst hit.

The likes of Ford, General Motors, Volkswagen, Toyota and Daimler have been shutting down factories.

A typical car today has hundreds of computer chips.

The shortage is also being felt by farm machinery and truck manufacturers at a time when demand for their products is booming in many markets.

Global farm machinery giant Agco reported it was not only short of computer chips but a range of other inputs including plastics and tyres needed to make tractors and harvesters.

The semi-conductor shortage has been driven by a COVID surge in consumption of electronic goods like game consoles and smart televisions.

Global silicon chip manufacturing has been increasingly concentrated in Asia with Taiwan's TSMC now the world's leading producer.

Ironically, TSMC's production is being hit by a crippling drought in Taiwan which normally enjoys high rainfall.

The production powerhouse needs more than 150 million litres of ultra-pure water per day in its chip manufacturing operations.

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Australian new vehicle sales hit a record 92,347 in April but the Federal Chamber of Automotive Industries said the supply chain was being impacted by the shortage of semi-conductors and shipping delays.

Meanwhile, Australia enjoyed a trade surplus of $10.1 billion in April despite ongoing trade and diplomatic rows with China, according to latest Bureau of Statistics data.

Exports of goods rose by $13 million to $35.9 billion while imports dropped by $1.8b billion to $25.8b.

Exports of rural produce reached $4.65b, down four per cent on the previous month.

China imported a whopping $10.85b worth of iron ore from Australia in April.

Australia's five main export markets for the month were China (up $591m), Japan (up 297m), South Korea (up $118m), India (up $23m) and Singapore (down $502m).

Despite ongoing fears about fuel security in Australia, our exports of petroleum rose by $245m or 40pc, driven by both quantity and price as oil prices increased in April.

Exports of oilseeds came off the boil after a stellar March, down $212m or 40pc as canola ships declined.

Imports of electrical machinery declined $184m (down 10pc), apparel by $177m (17pc) and transport equipment by $127m (34pc)

The slide in imports of electrical machinery after a record March were led by solar arrays and solar cells, down $36m (23pc).