Chip shortage expected to continue this year: report

German automaker Volkswagen expects the global semiconductor shortage to continue for at least the first half of 2022, though the situation should ease slightly in the second half of the year, automotive publication Automobilwoche was quoted by Reuters as saying.

“The volatile situation will affect us at least beyond the first half of the year,” Volkswagen head of procurement Murat Aksel told Automobilwoche in an interview. Automakers worldwide have been affected by the semiconductor shortage, due to supply chain disruptions due to the Covid-19 pandemic as well as sharp increases in demand for consumer electronics.

Demand for the chips is set to continue growing in the automotive manufacturing industry, and to that end, the automaker’s focus in on working closely with its suppliers to ensure improved availability of the chips, instead of looking to claim damages from suppliers who are lagging behind on chip deliveries, Aksel said.

Chip shortage expected to continue this year: report

In a separate Reuters report, other automakers including General Motors, Ford and Hyundai similarly predict that the chip shortage will ease in the second half of this year, however automotive chip producers such as NXP and Infineon have forecast that supply will continue to be short.

“Supply limitations are far from over, and will persist well into 2022,” Infineon CEO Reinhard Ploss was quoted by Reuters as saying in an investor call, and Infineon is concerned that the spread of the Omicron variant of the virus would lead China to shut factories and limit supply. Meanwhile, NXP said that the industry would not be getting out of the supply-demand imbalance this year, the report wrote.

Ford has also partnered with United States-based chipmaker Global Foundries to reduce the former’s dependence on Taiwan chipmaker TSMC for older technology chips, Reuters added.

“We’re very dependent on TSMC for our feature-rich nodes. The capacity is at risk over time as the industry moves to more advanced nodes, including us,” Ford CEO Jim Farley was quoted by Reuters as saying. We have very painfully learned the lesson that we cannot manage the supply chain for these key components as we have, Farley said.

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