A shortage of semiconductors will last until 2024 and slow global car production, consultancy AlixPartners said in a new study released on Monday. The reason is increasing demand for chips due to the rise of electric cars in the coming years.
Semiconductor shortages that erupted in 2020 with the COVID-19 pandemic will continue to slow production in 2024, according to consulting firm AlixPartners. So far, automakers and major suppliers have assumed that the massive supply problems will ease this year and disappear by 2023. However, car production will not reach pre-COVID-19 levels until 2024 at the earliest, according to the study.
"Anyone expecting early relief as early as next year is missing the fact that demand for chips per vehicle is rising," AlixPartners said. Production of electric cars will increase dramatically over the next few years, requiring about ten times as many chips as internal combustion models. Moreover, instead of investing in expanding production of so-called analog chips, which the auto industry desperately needs, semiconductor makers are investing in microcontrollers (MCUS) to meet high demand in other industries.
A shortage of semiconductors has been a drag on global auto production since last year. As a result, the supply of new cars has not kept pace with demand, an unusual situation in the industry. Fabian Piontek, head of Alix, says this will remain the case for now: car production will not exceed demand again until 2025. According to the study, the chip crisis, weak demand in Eastern Europe due to the Conflict between Russia and Ukraine and a shift from private cars to shared cars have dampened the recovery of the European car market.