Chip shortages have already delayed the production of 500,000 vehicles across the globe, notes CLEPA. In the EU some vehicle manufacturers have scaled-down production activities. It is likely the semiconductor chips shortage will limit manufacturers’ ability to restore global vehicle inventories until late 2021 or early 2022.
It is estimated in Europe, stock levels are healthy at 60 days between production and the moment vehicles hit the road, suggesting production disruptions on average have had limited consequences for vehicle manufacturers to meet demand. The question remains on whether the companies’ supply will be in the same situation in the upcoming year. And it is here, insists the supplier association, where jobs are very much at risk.
Processor chips installed in electronic control units are essential for the performance of vehicles, notes CLEPA. A modern car may contain around 100 electronic control units and between 20 to 40 microcontrollers in charge of functions such as engine and power steering, door lock, or keyless entry. The electrification of the powertrain and the development of connected and autonomous vehicles will only further enforce the importance of semiconductor chips.
Europe’s automotive industry sources 60-70% of its chips in production through contract manufacturing facilities in Taiwan and China. Europe has relatively strong automotive chip-design capabilities, but the EU’s fabless (outsourcing) industry specialised in chip design has shrunk by 50% during the last ten years, highlighting the need to reassess supply chain dependencies in the critical area of semiconductor technology.