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September 05, 2021 02:20 PM

Mercedes, VW, BMW warn chip shortage could last until 2023

Auto industry needs 10% more production capacity for chips, VW exec says

from wire reports
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    Daimler Kallenius

    Daimler CEO Ola Kallenius hopes Mercedes' supply of semiconductors improves in the fourth quarter.

    MUNICH -- The global semiconductor shortage may not entirely go away next year and could take until 2023 to be resolved, executives said at the IAA Munich auto show.

    Soaring demand for semiconductors means the auto industry could struggle to source enough of them throughout next year and into 2023, though the shortage should be less severe by then, Daimler CEO Ola Kallenius said.

    "Several chip suppliers have been referring to structural problems with demand," Kallenius said. "This could influence 2022 and [the situation] may be more relaxed in 2023."

    BMW CEO Oliver Zipse said he expects supply chains to remain tight well into 2022. "I expect that the general tightness of the supply chains will continue in the next six to 12 months," he said.

    Zipse said he saw no issues in the long-term, adding that the automotive industry was an attractive client for chipmakers.

    Volkswagen Group CEO Herbert Diess said shortages will continue for the next months or even years because semiconductors are in high demand.

    "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," he said.

    VW purchasing chief Murat Aksel said semiconductor supply remains very volatile and tight in the third quarter. "We hope for a gradual recovery by the end of the year," he said..

    The auto industry worldwide would need roughly 10 percent more production capacity for chips, Aksel said.

    Renault CEO Luca de Meo said the situation regarding the shortage was tougher than expected during the current quarter.

    He said the next quarter should bring some improvement despite a poor visibility.

    Renault was sticking to its previous forecast for a cut to production of 200,000 cars in 2021 due to the shortage, de Meo said.

    Automakers, forced by the COVID-19 pandemic to shut down plants last year, face stiff competition from the sprawling consumer electronics industry for chip deliveries, which have been upended by a series of supply chain disruptions.

    Cars have become increasingly dependent on chips -- for everything from computer management of engines for better fuel economy to advanced driver assistance features such as emergency braking.

    Daimler recently cut its annual sales forecast for its car division, projecting deliveries will be roughly in line with 2020, rather than up significantly.

    Daimler's Mercedes-Benz brand has been hit this quarter by factory shutdowns in Malaysia, which in recent years emerged as a major center for chip testing and packaging.

    Infineon Technologies, NXP Semiconductors and STMicroelectronics are among the key suppliers operating plants in the country.

    Kallenius said Daimler hopes its own supply of semiconductors will improve in the fourth quarter.

    Bloomberg and Reuters contributed to this report

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