Auto Industry Chip Shortage Could Go On For Years: Major Players Give Assessments

The auto industry may not get out from under the semiconductor chip shortage that has been plaguing it since the coronavirus pandemic started for a few more years, according to some industry experts.

The shortage of chips was the center of discussion Monday at the Munich Motor Show, with Ford, Volkswagen, and Daimler executives commenting on the challenges due to the short supply of the component.

The demand for chips has increased exponentially during the pandemic as consumers bought up tech products that also use the component as they stayed home for work and entertainment purposes.

The lack of chips to go around has forced automakers to reduce production shifts, temporarily close plants, and delay vehicles as they contend with the shortage of parts.

Volkswagen CEO Herber Diess told CNBC on Monday that the chip shortage is a “really big concern.”

CNBC noted how Volkswagen receives many of its semiconductors from Malaysia, which has been hit particularly hard by COVID in recent weeks, causing many factory shutdowns.

“Probably we will remain in shortages for the next months or even years because semiconductors are in high demand," Diess told Bloomberg. “The internet of things is growing and the capacity ramp up will take time. It will be probably a bottleneck for the next months and years to come.”

Ford Europe Chairman of the Management Board Gunnar Herrmann thinks that the chip shortage could extend until 2024, telling CNBC that it is difficult to know exactly when it could end. He referenced how electric vehicles use thousands of chips.

Daimler CEO Ola Kallenius sees the third quarter of this year as the “trough” of the chip shortage.

“We hope that in the fourth quarter that we will start coming back up again. But there is a level of uncertainty that we have to deal with in our production system. It needs to stay flexible,” he told CNBC.