Sunday, July 14, 2024
NewsAutomotive Supplier Says Chip Shortage Could Last Longer Than Pandemic

Automotive Supplier Says Chip Shortage Could Last Longer Than Pandemic

Chip shortages could take years to resolve

  • Global shortages of semiconductor chips continue to hamper auto industry

  • Automakers looking at ways to solve supply issues


A company that provides connectivity and telematics software to the auto industry has said that the semiconductor shortage affecting the auto industry is likely to have long-lasting effects well after the end of the pandemic.

“In conversations with clients and suppliers, it’s become clear that the effects of the semiconductor shortage will long outlast the pandemic, and will potentially have a far more serious impact on sales and future development,” said Tom Blackie, Founder and CEO of VNC Automotive. “Some of our suppliers are seeing prices for chips that are more than 30 times higher than before, and at that level, their use is no longer sustainable.”

Supply chain disruptions that began with COVID-19 and were exacerbated by fires and other natural disasters at semiconductor supplier plants has lead to inventory disruptions, an estimated six million units of lost production so far this year, and high prices for new and used vehicles.

Blackie said that he believes automakers will lower vehicle function as a result, allowing them to use fewer and more simple microchips. Automakers like GM have already dropped features including cylinder deactivation in order to keep lines running.

VNC says it has software in more than 35 million vehicles worldwide. The company is working to replicate in software what was done on a silicon chip before, which it believes will also help automakers weather the chip storm.

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