![]() BMW and Mercedes are reporting no significant supply chain issues, while Honda, Toyota, and GM are anticipating fewer production units due to constrained chip supply. ![]() Effects on manufacturers are uneven, though. The bottom line: automotive chip shortages will persist at least through 2023. What is the Automotive Chip Outlook for 2023?Īs Hassane El-Khoury, CEO of Onsemi, put it bluntly, “there’s nothing you can do now to change 2023”. In short, at a time when automakers and chip manufacturers are playing catch up, the demand continues to grow for more and more automotive chips. Today, that number is somewhere between $5,000 and $8,000. In fact, only five years ago the average dollar amount of semiconductor content in a vehicle was $1,500. Automakers had, essentially, lost their place in line.Įven before the pandemic, the growing market for electric vehicles (EVs), more feature-rich cars, and advanced tech like autonomous driving and bluetooth connectivity were putting pressure on fabs to manufacture an increasing number of chips for the automotive industry each year. Once the initial pandemic wave passed, demand for automobiles surged, but automakers were left flat-footed since chip manufacturers had limited chip production capacity. ![]() At the same time, the demand for PC and smartphone chips skyrocketed, so semiconductor manufacturers took on these more profitable, higher-volume orders. When the COVID-19 pandemic cratered demand for cars and trucks in March 2020, automakers began to cut forecasts for sales and in turn, canceled orders for chips. What is Causing the Automotive Semiconductor Supply-Demand Mismatch?
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