Chip crisis will last until 2022, say stakeholders

Chip crisis will last until 2022, say stakeholders
Market news |
No one in the industry has believed for a long time that the semiconductor supply bottlenecks in the automotive industry could be resolved quickly. But it is becoming increasingly clear that the chip shortage will last even longer than even pessimists had feared.
By Christoph Hammerschmidt

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No sooner have shareholders decided, with much optimism, to spin off Daimler’s truck division into a separate company than reality catches up with them: the chip shortage will continue to slow down truck production in the medium term. “We will definitely deliver less than we could have sold, and that also applies to next year,” the head of Daimler Trucks, Martin Daum recently told the press. The top manager could not give more details – only this much: “It is a fight for every chip”.

The shortage of materials will also have an impact on the prices of the vehicles built in the future, Daum predicted. Not only semiconductors are hard to come by at the moment, but also other raw materials such as steel and aluminium. Batteries are also extremely expensive: Daimler recently presented the new electric Actross – it is expected to cost three times as much as a comparable diesel-powered model to start with.

Daimler’s competitor MAN is not doing much better. The company has just had to announce the reduction of production at its sites in Munich, Nuremberg and Salzgitter – all because not enough chips and transistors are being supplied.

Among the car manufacturers, the chip crisis is currently hitting Stellantis’ Opel probably the hardest: the company is closing an entire factory from now until the end of the year; the employees will officially be put on short-time work. Production will resume at the beginning of 2022 “if the supply chains allow it”, a company spokesperson announced. The affected factory in Eisenach in the German state of Thuringia produces the Grandland compact SUV. Not affected is a second production line for this model in Socheaux, France.

Ford also stopped the production of its small car Fiesta in Cologne because of missing chips. The production stop is expected to last until the end of October, according to the company. The availability of semiconductors on the world market remains very volatile for the foreseeable future. Therefore, Ford assumes “that production stoppages may occur again and again in the foreseeable future”, a spokesperson for the company said.

According to the German Association of the Automotive Industry (VDA), production in the German automotive industry declined again. In its September report, the association speaks of a 44% decline compared to the same month last year. The shortage of semiconductor components is not the only reason for this decline, but it is a very significant one – the VDA report calls supply bottlenecks for semiconductors “once again the determining obstacle to production”.

Yet the OEMs are not usually the direct customers of the chip suppliers – these are rather the Tier 1 suppliers. Like Continental, for example. There, too, undelivered semiconductor components cause production stoppages. “We see these effects dragging on well into 2022,” Continental CEO Nikolai Setzer told the press. “Many market observers assume that a significant improvement is not to be expected until 2023, when higher production capacities are available at chip manufacturers,” Setzer said.

Even Bosch, although itself a producer of important semiconductor components for cars, cannot deliver all systems as quickly as planned. “Due to various influences, there is a general shortage of certain semiconductor components on the global procurement market. Bosch cannot escape this market development either,” a company spokesman explained. “In this tense situation, we are doing everything in our power, together with our customers and suppliers, to overcome the semiconductor shortages.”

The situation will remain as it is in the medium term, the spokesperson said. “There are still difficult months ahead; the situation will remain tense in 2022,” Stuttgart said. At the same time, Bosch also supplies its chips to other Tier Ones – but the company does not want to reveal to whom exactly.

The semiconductor manufacturers, on the other hand, are logically quite relaxed about the situation. At the beginning of the week, Infineon as one of the largest automotive semiconductors confirmed its quite ambitious sales targets for the coming quarter. 

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