The automotive semiconductor crisis

This Automotive World report considers how the chip shortage is impacting automotive production, development and thinking

It is of little surprise that a global semiconductor shortage has emerged in hindsight. The increasing number of connected products, and not just those from the automotive industry, was always likely to put manufacturing lines and supply chains to the test at some point. The pandemic was the straw that broke the camel’s back.

Though the shortage is affecting all industries and regions, automotive’s struggles are particularly interesting. Megatrend development, particularly on vital topics such electrification and autonomy, must continue at acceptable rates if the sector is to meet internally and externally set deadlines. But, in a sector where automakers have already been forced to limit output and cut connected features from new models, it is proving extremely challenging to juggle longer-term projects with shorter-term productivity.

There is no silver bullet for the industry either, with the projection that the shortage could still be ongoing as late as 2024. However, the need to keep calm and carry on in this period offers an opportunity rethink how supply chains are designed, what constitutes a valuable supply deal and whether there’s even scope to bring chip manufacturing into existing company portfolios.