Automakers to continue facing semiconductor shortages due to Covid surges

The auto components industry has experienced very challenging business cycles in the last few years due to shortage of semiconductor.

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Covid-19 has continued to impact the global economy in its second year, resulting in uneven shortages and tight supply in the automotive semiconductor market amid a labour shortage, according to a new report from IDC.

Semiconductors in 2021 will be challenged by a shortage of mature technology nodes.

As the industry builds up inventory to normal levels, IDC expects tight semiconductor supply to persist through the first half of 2022.

With chips moving upstream, the automotive market is continuing to be affected, limiting automobile production and pushing original equipment manufacturers (OEMs) to create higher value vehicles using semiconductor supply, resulting in higher vehicle average selling prices in 2021.

Nina Turner, research manager said, "Automotive semiconductors will continue to be a limiting constraint on the automotive market through the first half of 2022, but barring any unforeseen shutdowns or semiconductor manufacturing issues, supply should gradually improve through the second half of the year." 

Turner added that, if no other supply chain shocks occur, the automotive market should begin to improve by the end of 2022 and into 2023. In the semiconductor industry, mature process nodes were a key supply constraint.

Although the automotive semiconductor market is largely driven by these older process technologies, there are many semiconductors that are made using these mature process technologies at 40nm and above. These include LCD drivers, power management ICs, power, Auto ICs, and microcontrollers.

According to the report, companies are slowly building capacity, but it will be incremental this year and accelerate in 2023 and beyond.

With Inputs from IANS