Automakers, including GM Motors, Ford and Hyundai, predict a nearly two-year chip constraint will ease in the second half of 2022, but car chip makers, on the other hand, expect a recovery to last longer.
While reporting quarterly results for the past two weeks, GM CEO Mary Barra estimated that the semiconductor shortage will decrease in the second half, Ford estimated a significant improvement in the second half, following a low level of vehicle sales from the first quarter, and Hyundai predicted that chip supply would return to normal levels in the third quarter of this year.
But top car chip makers, such as NXP and Infineon, have a different view and say a tightening of supply will persist despite production increases.
Different perspectives on the most pressing problem facing the automotive industry prolong the uncertainty about its recovery from the coronavirus pandemic and risk hampering its efforts to transition to new, chip-intensive technologies such as electrification. and safety and driver assistance functions.
The lack of chips will cost the global car industry $ 210 billion in revenue and will lose production of 7.7 million vehicles in 2021 alone, the AlixPartners consultant estimated in September.
Qualcomm chip maker was optimistic.
“I think many of our colleagues, along with us, give priority to the car and transportation business as much as possible,” Qualcomm chief financial officer Akash Palkhiwala told Reuters.
However, the major car chip makers have been less optimistic.
The market remains volatile
Infineon said the supply-demand balance will improve for some chips in the second half of this year, but that the mature chip market – crucial for carmakers – will remain tight.
“Supply constraints are far from over and will persist until 2022,” Infineon CEO Reinhard Ploss said during a call to investors. Infineon is concerned that the spread of the Omicron COVID-19 variant would cause China, with its zero-COVID strategy, to close factories, limiting supply.
NXP also said that the industry will not get out of the imbalance between supply and demand this year.
Semiconductor manufacturers have an incentive to focus on newer and more expensive chips, and Apple’s Tim Cook said there are significant supply constraints for “legacy nodes,” less sophisticated chips used in power management, and display devices. , although they are improving in the current quarter.
A chip factory takes several years to build and reach full capacity, said STMicroelectronics. The company said it will take until 2024 or 2025 to see a major increase in capacity.
Ford has partnered with US chip maker GlobalFoundries to reduce its reliance on Taiwan’s TSMCs for older technology chips, which Ford CEO Jim Farley described as “feature-rich”.
“We are very dependent on TSMC for our feature-rich nodes. Obviously, capacity is in jeopardy over time, as the industry moves to more advanced nodes, including us, ”Farley said at a conference.