Reports from industry insiders show there is a global chip shortage in the automotive industry. This shortage is beginning to spread to large automobile companies such as Volkswagen, General Motors, Ford, Toyota, Stellatis, Hyundai, and so on. As of now, there are still no obvious signs of relief. The scope of the chip shortage influence is still expanding, and it even affects Nissan. According to insider reports, many factories in Japan will significantly reduce production next month due to chip shortages. Resolving the current shortage of automotive chips requires strong support from chip foundries. TSMC, the world’s largest chip foundry, announced in January this year that they will provide automotive chip suppliers with capacity support as their top priority.
In the first quarter earnings analyst conference, TSMC CEO, Wei Zhejia, also talked about the tight supply of automotive chips. Wei Zhejia said that starting from 2018, the global auto market has been weak. After entering 2020, the pandemic had a huge impact on the automobile market which affects its supply chain. TSMC claims that its customers in the automotive field have been reducing their orders.
TSMC’s CEO is positive that chip shortages will end next quarter
However, in the fourth quarter of last year, there was a rise in the orders. Furthermore, he claims that the company is trying its best to support customers due to global chip shortages. In January this year, they announced that they would provide capacity support for automotive customers as their top priority. The company is even cooperating with customers in other fields to reallocate the capacity of the fab. However, the sudden blizzard in Texas and the sudden interruption of production in some factories in Japan have exacerbated the tight supply of automotive chips.
Although the current shortage of automotive chips continues, Wei Zhejia said that with the recovery of other manufacturers’ production and the increase in their production capacity, they expect the shortage of automotive chips to improve significantly in the next quarter.
However, judging from the information disclosed by Wei Zhejia, after the production of automobile chips, it will take some time to be used in automobile production. According to TSMC’s CEO, the automotive supply chain is long and complex. From chip production to automotive chips, it takes at least 6 months, with multiple suppliers in between. This will make the recovery process also very complex.