The microchip shortage has cost the automotive industry millions of lost units of production and billions in lost revenue this year. The latest estimates have the problem lingering through the first half of 2022.
To better understand the root cause of this problem -- and why it will linger -- Automotive News Europe last month visited two of STMicroelectronics' fabrication plants, or “fabs" in Agrate, near Milan.
The differences between a typical car assembly plant and STM's chip factories, one in operation and one under construction, are striking.
- A vehicle plant normally works two production shifts, five days a week for a total of 10 shifts. That number can be increased to as many as 21 if the automaker needs to boost production by adding night and weekend shifts.
- STM's plants are, or will once completed, operated 24 hours a day, 365 days a year, leaving little to no flexibility to boost output.
- A new car plant can go from groundbreaking to start of production in two years and reach full capacity in as little as six months.
- That same process at a chip plant takes up to five years.
- While it takes 15 to 30 hours to build a vehicle it takes five months to produce, package and ship a chip to an automaker for installation in a vehicle.
That’s the bad news.