Automotive chip shortage gets worse

Automotive chip shortage gets worse

Automotive chip shortage gets worse

It is AlixPartners’ third estimate this year. In January, it estimated that lost car sales would be worth $61 billion and in May it estimated they would be worth $110 billion.

IHS Markit reckons the shortage will last till late 2022 with supplies of some of the most advanced  ICs not meeting demand until 2023.

Toyota cut car production 40% in September. In the US, new car inventory is at 30% of pre-pandemic levels. Car rental companies are running out of vehicles.

The main reason for the shortage was the just-in-time order strategy of the car makers which meant they did not hold chip stocks and then decided to cancel all chip orders when the pandemic hit.

Other reasons were a lockdown at the Vietnamese assembly plants, a drought in Taiwan which disrupted water supplies, the fire at Renesas’ Naka fab and the storm in Texas which hit Samsung’s Austin fab.

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