The scarcity of chips has hit the automotive industry especially hard, making it difficult for many auto makers to meet their production goals. Some of the auto makers, however, are adopting new strategies for coping with the lack of vital components.
“A global semiconductor shortage has constrained auto production all year, creating production—and stock market—volatility for the entire automotive sector. Ford Motor is taking new steps to minimize the impact on its operations,” writes Al Root in Barron’s. Ford and GlobalFoundries on Thursday announced a collaboration to manufacture automotive semiconductors in the U.S. The alliance shows that after their difficult 2021, car companies want more control over the supply of chips that enable almost all of the features common on new automobiles.”
From my perspective, Ford’s move makes total sense. Today’s cars are essentially computers on wheels, and you can’t build computers without chips. I suppose the real question is why didn’t the auto makers realize this sooner, but hindsight is always 20-20.
In other technology news, Zoom Video Communications will report earnings today after the market closes. We’re major fans of Zoom at HMG Strategy, and Eric Yuan, Zoom’s founder and CEO, is one of our favorite tech leaders. Yet the company stock has been under pressure recently, and it’s not entirely clear what the future holds for this innovative and visionary firm.
“Zoom shares have fallen 28% since the company reported results for the July quarter, reflecting growing concerns about both slowing growth and increased competition from other players in the videoconferencing space, in particular Microsoft Teams,” writes Eric J. Savitz of Barron’s. “With its core videoconferencing business under pressure, Zoom has been pushing more aggressively into new areas, in particular Zoom Phone, the company’s cloud-based telephony business. But competition in that market remains fierce, from RingCentral and others.”
Frankly, my instinct tells me that Zoom will overcome the obstacles facing it and continue its winning streak. I’m not predicting smooth sailing, but I am confident that Zoom has the leadership and the strategic vision necessary for thriving in today’s incredibly turbulent economy.
