BLUFA global shortage of semiconductor chips is causing—what is hoped is only temporary—problems for the automotive industry.
Several of the world’s biggest car makers are blaming the global chip shortage for disappointing financial results. Last month, senior executives from both Volkswagen (VW) and Stellantis described the ongoing semiconductor shortage as a major problem. This article makes the following points:
The global chip shortage is continuing to wreak havoc on the automotive sector.
With no end in sight, the semiconductor chip shortage is expected to cost the global automotive industry $210 billion in revenue in 2021.
VW CEO Herbert Diess confirmed that VW’s China business had been disproportionately affected.
In comparison, Porsche and Audi (Volkswagen’s premium brands) have been more resilient, with Diess saying that those brands had delivered positive results.
But Diess claimed the news wasn’t all negative. He said demand was high, and the company had filled orders in all areas, including their electric vehicle sales.
He is optimistic that semiconductor supply will pick up in the next quarter, but he still expects supply constraints in 2022.
Analysts at JPMorgan and UBS believe now is the ideal time for investors to increase their exposure to the automotive sector.
France’s STMicro, which makes chips for the likes of Tesla, delivered strong third-quarter results and expected the final quarter for the year to be even better thanks to demand from the automotive market.
STMicro President Jean-Marc Chery told CNBC he believed that the situation would improve in 2022, adding that chipmakers were caught off guard when demand for automotive chips peaked at the start of 2021.
Feb 2021 HBR Why We’re in the Midst of a Global Semiconductor Shortage
Mar 2021 The Guardian Global shortage in computer chips 'reaches crisis point'
Aug 2021 BBC Why is there a chip shortage?