Has Brembo had to cancel any orders because of the chip shortage?
We have had no such problems.
Premium automakers including Mercedes-Benz have had production disruptions because of the chip shortage. Have these issues forced Brembo to halt deliveries?
So far, we did have just some limited slowdowns.
Do you need a lot of chips for your products?
We use some, but not as many as most automakers and other suppliers. As I mentioned, we maintain a high level of stock and that provides us a good amount of protection.
Which of your products use microchips?
They are in all kinds of brakes [including hydraulic, electric and by-wire systems]. There are chips in the control unit that manage the braking process through actuators. Chips will be installed in the brake caliper in the near future to collect data on the brakes and their usage.
How long do you expect the chip shortage to last?
Until the end of 2021. After that supply and demand should be more balanced.
Will the second half of the year be worse for the auto industry because of seasonal factors that affect semiconductor demand or will chipmakers direct more chip production toward the industry?
Your second statement is right.
Many automakers have chosen to prioritize production of their higher-end models. Has that been beneficial to Brembo?
We do believe our premium customers have tried to preserve their high-margin models, on the other hand, they sometimes remove options to maintain production of a vehicle.
Will the current crisis have any long-term effects on the overall semiconductor sector, potentially resulting in more chip plants being built outside of Asia?
I believe Europe and the U.S. will have to invest more in microchip capacity. The bulk of capacity was transferred to the Far East, and this strategy has to change. Chips are strategic not only for the automotive industry, but for the overall digitalization of all part of our societies.
How did the pandemic affect Brembo and will this and the chip shortage cause the company to re-think its approach to supply chain management?
Brembo has a global production footprint. Therefore, if there's a crisis in a region, it only affects that region, so it affects both us and our customers. In such cases we are partially shielded from wide-scale consequences. That being said, the hardest-hit area during the first wave of the COVID-19 pandemic was Italy's Bergamo area, where our headquarters and main plant are located. When that happened, we closed our plants one week before the government-imposed national lockdown. We took a risk because without official measures put in place by the government we had no right to close shop. Then all of Europe ground to a halt. There was no supply issue anymore because everything stopped. We, however, kept in constant contact with our customers, who appreciated our openness.