Experts predict the semiconductor shortage will hamper inventory through next year as car production slows down due to the worldwide supply of semiconductors. Over the past several weeks, production has slowed or halted at seventeen car manufacturers across North America and Europe.
Last Wednesday, Ford CEO Jim Farley said that “while the company is seeing some signs of improvement in chip supply, the situation ‘remains fluid,’ with continuing delays from a semiconductor factory in Japan that is recovering from a fire,” the Washington Post reported. “We do see the chip issue running through this year, and we could see it bleeding into the first part of next year,” John Lawler, Ford’s chief financial officer, told investors.
According to the consulting firm AlixPartners, the shortages mean that the global auto industry will produce nearly 4 million fewer vehicles than planned in 2021, causing a loss in sales of approximately $110 billion.
Although there is debate about when the semiconductor shortage will be resolved, the additional production of automotive chips from semiconductor makers like Bosch and GlobalFoundries could ease the supply shortage.
Dan Hearsch, managing director at AlixPartners told the Washington Post that “the picture for automakers could start to improve in eight to 10 weeks, allowing them to return to more normal production schedules.” Hearsch added that such a timeline is “dependent on a lot of things continuing to go right, and covid variants have already had a bit of an impact on Malaysia,” where factories conduct testing and assembly of the chips.
However, Pat Gelsinger, chief executive of chip-manufacturing at Intel, estimates that the chip shortage will extend for much longer, stretching well beyond 2022.
