VW expects microchip shortage to last until 2024

BERLIN -- Volkswagen Group expects the semiconductor shortage to continue longer than expected, the automaker's finance chief Arno Antlitz said.

Supplies of semiconductors will not normalize until 2024, by which time there will still be a structural undersupply, Antlitz said in an interview with Boersen-Zeitung published on Saturday

VW Group has been forced to halt production at several factories including its Wolfsburg plant and its EV factories in Zwickau and Dresden, Germany, several times due to a lack of chips.

Antlitz said he expects the semiconductor situation to ease this year and next year, but the shortage will continue into 2024 because chipmakers will not be able to meet rising demand for semiconductors even as more chip production comes on line.

"We see a structural undersupply in 2022, which is only likely to ease somewhat in the third or fourth quarter," he said. "The situation should improve in 2023, but the structural problem will not yet have been fully resolved.

BMW Group CEO Oliver Zipse made similar predictions in an interview with newspaper Neue Zuercher Zeitung published on Monday.

"We are still in the height of the chip shortage," Zipse was quoted as saying. "I expect us to start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023."

BMW said during its annual press briefing in mid-March that it expected the chip shortage to last throughout 2022.

Automakers are dealing with the double challenge of the microchip shortage and disruption of wire cable harnesses manufactured in Ukraine caused by Russia's invasion of the country.

Antlitz said individual VW Group plants are continually forced to cancel shifts because the automaker's supplier in the Ukraine is only operating on a single-shift basis.

"We have set up a crisis team and, in some cases, also shifted volumes to other production facilities of the same suppliers. However, the alternative locations are not intended to replace the production sites in Ukraine in the long term. We stand by our existing supplier sites in Ukraine and provide support where we can," Antlitz said.

Looming energy crisis

Asked about rising energy costs and the possibility of a ban of imports into Germany of Russian natural gas, Anlitz said the automaker has not yet decided when to implement its plan to convert power plant operations in Wolfsburg from coal to natural gas.

"We haven't switched over yet. But we are currently in the process of switching over. At the moment, the coal-fired power plant is still running while the gas-fired power plant is ramping up. We are watching very closely what happens in the next few days and weeks. At the moment, we haven't decided when we will finally shut down the coal-fired power plant."

Antlitz also reiterated plans for a possible IPO of VW Group's Porsche's sports-car subsidiary.

"There has been a lot of speculation there recently about the timing, but we are still aiming for an IPO in the final quarter," he said.

Reuters contributed to this report