The auto industry’s shortage of semiconductors will last into 2023 and possibly beyond, according to forecasts delivered on Feb. 23.
Analysts for IHS Markit, AlixPartners and Wells Fargo spoke at a webinar sponsored by the Automotive Press Association. They forecast that the shortage may ease this year but it is not ending.
“These shortages are going to continue,” Dan Hearsch, managing director in the automotive and industrial practice of consulting firm AlixPartners, said during the presentation.
Automakers “have to order chips much longer in advance,” he said. “Every order is starting from scratch.”
Vehicle supplies have tightened while prices have increased.
In 2021, analysts viewed the semiconductor situation as a short-term problem. Instead, the shortfall continues. Demand from automakers for computer chips has increased as they develop more electric vehicles. As a result, the companies need more chips per vehicle.
“Most EVs will have a lot more semiconductor content,” said Phil Amsrud, senior principal analyst and semiconductor researcher at IHS Markit. He estimated that computer chip demand in the industry has doubled since 2017.
The shortage of computer chips has caused automakers to implement temporary shutdowns over the past year.
“Production cuts are still coming but the magnitude of the cuts is less,” said Colin Langan, lead automotive analyst for Wells Fargo. “We’re crawling out of the situation.”
Automotive suppliers continue to feel the impact of production reductions by their customers, he said.
“Suppliers have not recovered,” Langan said. “Spotty production schedules make it harder to reduce costs.”
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