Automotive News: German car industry faces the worst chip supply shortage in 30 years

According to Automotive News Europe, chip maker Infineon Technologies said that the production outages at two of its plants had hit deliveries to core automotive clients, as the auto industry battles the worst supply crunch in three decades.

Just as Infineon was recovering from a winter storm that crippled its plant in Austin, Texas, a new wave of coronavirus infections forced the shutdown of one of its plants in Malaysia in June.

CEO Reinhard Ploss said recovery was being held back by “acute supply limitations across the entire value chain.”

“Inventories are extremely tight and end demand is being postponed. All in all, it will take time to get back to a supply-demand equilibrium. In our view, this will take until well into 2022,” Ploss said.

Ploss said inventories were at a historic low. “Our chips are being shipped from our fabs straight into end applications,” he said.

Under those circumstances, any government-imposed lockdowns, such as the one at Melaka in Malaysia where Infineon has a production site, were especially serious.

With the Melaka plant only expected to return to producing at full capacity this month, Infineon faces a hit in the double-digit millions of euros that will run into its fiscal fourth quarter to Sept. 30, Ploss said.

Confirming the grim picture, the Ifo economic research group said on Tuesday that the German car industry and its suppliers faced the worst chip supply shortage in 30 years.

The report pointed out that Infineon will be able to raise output of specialist power-management chips with the commissioning of its new plant in Villach, Austria, but it still relies heavily on Asian contract manufacturers that are running flat out.

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