More car manufacturers will decrease production numbers for Q1 this year, as the semiconductor chips shortage creates a serious chip crunch, Reuters reported.

Volkswagen, as well as Indian and Asian car manufacturers had stated their production numbers would be lower in 2021, as OnlineComponents noted late last year. Now Ford, Toyota, Chrysler Fiat, Honda and Nissan also reported reduced production numbers for January and beyond.

“Automakers and electronic makers are facing a global shortage of chips as consumer demand has been bouncing back from the coronavirus pandemic, causing manufacturing delays.

Credit Suisse analyst Daniel Levy said in a research note that the chip supply issues may limit near-term auto production for the industry, but industry officials said they are prioritizing production of higher-profit vehicles,” Reuters stated.

The automotive industry has bounced back quicker than expected and the semiconductor industry has not been as quick, while other products like laptops and mobile devices have had increased sales during 2020 and increased demands for the chips.

Part of the shortage can also be attributed to the US blacklisting China’s Semiconductor Manufacturing International Corp, sending chip companies scrambling to find a replacement. The company was the largest manufacturer in China.

This reduction in production will also impact employment by the companies affected. “U.S. automaker Ford said it would idle its Louisville, Kentucky, assembly plant, which builds the Ford Escape and Lincoln Corsair SUVs, pulling ahead a scheduled week-off from later in the year,” Reuters was told.

“The auto industry is using more semiconductors than ever before in new vehicles with electronic features such as Bluetooth connectivity and driver assist, navigation and hybrid electric systems. Semiconductors are typically silicon chips that perform control and memory functions in products ranging from computers and cellphones to vehicles and microwave ovens,” the Associated Press noted.