Institutional prediction: chip shortage will lead to global automotive industry losses exceeding 200 billion US dollars

Due to the shortage of chip supply chains, global car manufacturers may lose over $210 billion in revenue this year. The White House is urging car manufacturers, chip companies, and other industry participants to work together to enhance transparency in the semiconductor industry supply chain.

According to a latest forecast analysis released by global consulting firm AlixPartners, the losses caused by the ongoing semiconductor shortage to the global automotive industry will double. The agency has significantly increased the estimated revenue loss for the automotive industry in 2021 from $110 billion in May to $210 billion, and raised its forecast for car production cuts this year from 3.9 million vehicles to 7.7 million vehicles.

According to research firm IHS, global car production is expected to decrease to around 72 million vehicles this year, compared to IHS's previous forecast of around 76.8 million vehicles.

Everyone hopes for some relief from the chip crisis, but the lockdown measures in Malaysia due to the pandemic and the ongoing obstacles faced elsewhere have exacerbated the situation, "said Shiv Shivaraman, Asia Pacific business head of iResearch.

Airobo believes that chips are just one of the major disruptive factors currently facing the automotive industry, including resin, steel, and labor shortages, which also have an impact on the automotive supply chain.

Due to scarce chip supply, car manufacturers such as General Motors, Toyota, and Chrysler's parent company Stellantis have lowered their car production and sales expectations for this year.

French automotive parts supplier Faurecia also lowered its full year sales forecast on Thursday, from 16.5 billion euros to 15.5 billion euros, and lowered its profit margin from 7% to around 6%.

The automotive industry currently no longer has so-called 'shock absorbers' in production or raw material acquisition, "Dr. Stephen Dyer, Managing Director of iResearch in Shanghai and Head of the Asia Pacific Automotive Industry, told First Financial reporters." Although Chinese chip manufacturers allocate more products to automotive customers, resulting in less severe impact on automotive production than in other regions due to chip shortages, we expect the Chinese automotive industry to still face chip shortage challenges after the end of 2021

US Commerce Secretary Gina Raimondo and National Economic Council Director Brian Deese met with semiconductor industry participants on Thursday. The companies attending the conference include the three major automobile manufacturers in Detroit, as well as Apple, Daimler, BMW, Globalfoundries, Micron, Microsoft, Samsung, TSMC, Intel, and Amperex.

Raymond reiterated the need for the industry to take the lead in addressing supply chain bottlenecks caused by global chip shortages, and initiated a voluntary request to provide information on chip crises within 45 days, with the aim of improving supply chain transparency to gain a more detailed understanding of supply chain bottlenecks and predict challenges.

Stellantis CEO Carlos Tavares, who attended the White House virtual meeting, stated that the automaker will cooperate with the information request and called on the entire semiconductor supply chain to participate widely in this initiative.

And more car manufacturers joining the "chip manufacturing" industry has also put pressure on the production capacity of wafer manufacturing factories. According to South Korean media reports, Samsung Electronics is in talks with Tesla to consider providing a 7-nanometer production process for Tesla's next-generation autonomous driving chips.

Tesla CEO Elon Musk announced at the company's AI Day last month that Tesla plans to introduce new chips for the autonomous driving of its electric pickup truck Cybertruck in the next year or so.

According to data from analysis company TrendForce, in the chip foundry manufacturing industry, TSMC has the largest market share at 52.9%, second only to Samsung with a market share of 17.3% as of the end of June.

Intel also announced its participation in chip foundry. At the beginning of this month, Intel announced that it will invest 80 billion euros over the next decade to increase chip production capacity in Europe and take the lead in opening semiconductor factories for car manufacturers in Ireland to alleviate the shortage pressure of automotive chips. At present, the plan has received support from nearly a hundred automobile manufacturers and major suppliers, including BMW, Volkswagen, Daimler, and Bosch.

Intel regards automobile manufacturers as a key strategic focus. The company expects that by 2030, chips will account for 20% of automotive costs, a fivefold increase from 4% in 2019.

Anand Nambiar, Global Head of Merck's Semiconductor Materials Division, said in a media interview last month, "More and more wafer fabs are demanding long-term, stable supply agreements with upstream suppliers, which means that many companies are preparing for capacity increases in the future. Companies are starting to focus on balancing quantity (mature process chips) and quality (advanced process chips)