Chip Shortage Costs $ 210 Billion – Double Initial Estimates, Consultant Says | New

The global semiconductor shortage will cost $ 210 billion in lost revenue this year, estimates AlixPartners LLP, up 91% from the company’s $ 110 billion forecast in May.

In addition, the global consultancy firm based in the Detroit metro area now expects the industry to lose production of 7.7 million vehicles this year, a 97% increase from 3.9 millions estimated in May.

The updated forecast represents a sharp drop from previous expectations and comes as automakers continue to tackle the semiconductor shortage, still leading to production shutdowns at various factories across North America, Europe and Europe. Asia. COVID-19 outbreaks and lockdowns in Asian countries where most semiconductors are made have prolonged the problem.

The latest victims of the chip shortage are Stellantis NV factories producing Ram pickup trucks, Jeep Grand Cherokee and Dodge vehicles, which will be idling next week.

The demand for consumer electronics has worsened the scarcity of microchips used in vehicle electronics, halting production at auto factories around the world and driving up vehicle prices. Automakers have sought to protect their most profitable vehicles, but say they have little knowledge about producing chips at the heart of the supply chain.

AlixPartners previously expected production impacts to be minimized in Q3, but now the company doesn’t expect to see it until maybe Q2 2022.

Dan Hearsch, general manager of the automotive and manufacturing practice of AlixPartners, explained that issues that were believed to be resolved were not. And others “we didn’t think it would go badly, went rather badly,” he said, noting the availability of manpower and other disruptions at small suppliers as well. peaks of COVID-19 and logistical difficulties.

“There is no cushion,” he said. “There is nothing left to absorb the impacts, so every little thing, a week of downtime now creates a month of downtime elsewhere. “

General Motors Co. Chairman Mark Reuss told the Detroit Regional Chamber’s Mackinac Policy Conference this week that the supply of fleas comes from places with low COVID-19 vaccination, “So there is some volatility there… we really need to get vaccinated and protocol in these factories, which we are working very hard on.

“We’re going to see stabilization to some extent before we get the volume we really need,” he said.

Even before the chip shortage, GM had lower inventories due to the pandemic that halted production for eight weeks in 2020.

“Are we going to have stable inventory where we have what we want… across the industry in our dealerships? He said at the event on Tuesday. “The answer is no because there are two holes: there is the chip hole, there is the pandemic hole, when you look at that… throughout the industry, it is quite difficult.”

Copyright 2021 Tribune Content Agency.

About Anne Wurtsbach

Check Also

Durable consumer goods sector posts double-digit growth this Navratri

With the festival season kicking off with Navratri and Dasara, consumer durables companies said they …