Automakers should expect more chips in the second half of the year, but overall supply squeeze is expected to continue through 2022, according to one of the industry’s largest vendors, Infineon.
However, the Munich-based company said it would not start making up for the volume loss until 2022 and blamed vendor problems for not increasing chip manufacturing capacity quickly enough.
“We expect the imbalance between supply and demand to continue for a few more quarters, with the risk that it will last until 2022,” Reinhard Ploss, CEO of Infineon, told a press conference. Virtual.
Most automakers have been forced to halt production at some point this year due to a lack of semiconductors. The shortage was caused by growing demand for silicon-powered consumer electronics during the pandemic, as automakers canceled parts orders due to lower sales. When car orders resumed at the end of 2020, manufacturers found themselves at the end of the line with chip suppliers.
Infineon Marketing Director Helmut Gassel said the chip shortage affected production of around 2.5 million cars in the first quarter of 2021. Ford last week said the shortage could cost $ 2, $ 5 billion to the American automaker this year.
Infineon, which derives 45% of its turnover from the sale of chips to automakers, pointed to the “bottlenecks” of the companies to which it subcontracts the manufacture of chips.
Most chips are based on designs from companies like Infineon or Arm, but they are physically manufactured in foundries owned by other companies. Most of them are located in Taiwan, South Korea, the United States and to a lesser extent China.
The global chip shortage was further compounded by a factory fire in Renesas, Japan – another key supplier of automotive chips – and a cold snap shutting down Samsung and Infineon factories in Austin, Texas earlier this year.
Executives from other key chip players such as Intel, Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC) have warned of a squeeze that will last until 2022 and possibly 2023.
While automakers and consumer electronics companies don’t compete for the same semiconductors, they compete for manufacturing capacity. Cars tend to use older microprocessors, while smartphones and other personal devices use more advanced chips. According to automotive analysts at GlobalData, “Modern vehicles depend as much on computer chips as they do on their engines and chassis.”
“Everyone is scrambling for more, whether it’s for personal computers, cellphones, automobiles or whatever,” Ploss said. “We fight for every installment.”
In response to the crisis, chipmakers have injected billions of dollars to increase capacity, while chip designers are investing in their own manufacturing plants to become less dependent on chip contractors. Infineon plans to complete construction of a chip production site in Austria later this year.
Last week, Intel announced a $ 3.5 billion upgrade to its plant in New Mexico and announced earlier this year that it would create a new company dedicated to manufacturing chips based on the designs of Intel. ‘other companies.
Demand for the chips is such that TSMC plans to build “up to five” additional factories in Arizona, according to Reuters sources. Last month, the chipmaking giant said it would invest $ 100 billion over the next three years to increase its production capacity.
In June 2019, Infineon acquired Cypress Semiconductor for $ 10.1 billion, giving it a 13% share of the automotive chip market.
A Verdict analysis of recently released government figures showed UK carmakers forced to shut down or cut production in recent months have placed workers on Covid-19 leave and have demanded their wages from the job retention program against the coronavirus, raising the question of whether their struggles were directly attributable to the pandemic or the semiconductor shortage.