MUNICH: The restrictions on car production in Germany due to a shortage of semiconductors will last "at least until 2024," according to a report by management consultancy Alix Partners published on Monday.
Currently, it takes six months from order to delivery of chips, which is twice as long as normal.
The demand for chips per vehicle continues to grow due to increasing digitalisation and electrification, but semiconductor manufacturers are holding back on expanding their capacities due to the threat of recession and rising interest rates, the industry experts wrote.
Semiconductor manufacturers' profit margins on conventional car chips are up to 11 percentage points worse than on chips for consumer electronics or industrial customers, they said.
From the chip manufacturers' point of view, the automotive industry is "only a small customer for semiconductor chips," with 6 to 10% of global capacity.
Even in the event of shrinking demand for chips for mobile phones and game consoles, "chip production remains the bottleneck for the automotive industry," the report stated.
Demand will continue to outstrip supply in 2024, and that will contribute to rising prices for semiconductors and, ultimately, vehicles.
The automotive industry's demand for chips will grow significantly by 2026: by 75% for analogue chips needed for electric drives, and by 30% for wafers for microcontroller units.
However, semiconductor manufacturers are planning only 56% and 12% more capacity in these areas, respectively.
Because the development of a new car model takes three to five years, chips are no longer up to date when the car comes onto the market.
"Current chips with a technology of 28 nanometres and more for most applications in cars are equivalent to an iPhone 4 from 2010-13," the industry experts wrote.
It is not lucrative for semiconductor manufacturers to free up capacity for the car industry by switching to old technologies: "Investments by the semiconductor industry are mainly focused on more profitable, new technologies."
Alix expects that the centralisation of vehicle control will bring about long-term improvement for carmakers. With a few central control units and a flexible software architecture, new functions could be added by update, without requiring new hardware.
