Porsche CEO: "Semiconductor Chip Shortage Serious, Long-Term Measures Needed"

Production Disruptions Worsen Due to Power Outage in Austin, US and Earthquake in Japan

(Source: Forbes)

[Asia Economy Reporter Yujin Cho] As the production disruption caused by the shortage of automotive semiconductor chips is expected to prolong, confusion in the global automobile manufacturing industry is increasing. Supply instability has intensified due to power outages caused by the cold wave in Austin, Texas, USA, and operational disruptions caused by an earthquake in Japan, leading to forecasts that the semiconductor chip shortage will continue until the second half of this year.

Oliver Blume, CEO of Porsche, warned in an interview with CNBC's "Squawk Box Europe" on the 21st (local time) that "the impact of global semiconductor shortages on production disruptions is severely damaging operations." He said, "With demand remaining high in consumer electronics and automobile sales, the semiconductor chip shortage has paralyzed production lines in the automotive industry," adding, "the semiconductor (supply shortage) problem is very serious, affecting us daily, and we must closely monitor the situation and devise long-term countermeasures."

His remarks come as global automobile sales suddenly surged since the end of last year, continuing the shortage of automotive semiconductors. The shortage of automotive semiconductor chips is being experienced by automobile manufacturers worldwide, including the United States, Europe, and Japan. Due to the shortage of essential chips, General Motors (GM) and Ford have already begun production cuts, and Audi, whose production lines have stopped, has implemented furloughs for more than 10,000 workers. Japanese automakers Toyota and Honda have also forecast that this situation will continue until the second half of this year.

The impact of the semiconductor chip shortage on the automotive industry became clearly visible starting last month. The cause was the overlapping of massive purchasing demand for IT-related products, which benefited from prolonged lockdowns and the spread of remote work due to COVID-19. Additionally, most automakers, fearing a consumption slump at the beginning of the COVID-19 crisis, reduced parts orders to keep parts inventory low, which exacerbated the production disruption.

Supply instability has further intensified due to the power outage in Austin, Texas, where automotive MCUs are produced, and operational disruptions caused by the earthquake in Japan. MCUs, which are difficult to procure, are installed at least one per automotive ECU module, and on average, about 80 ECUs are installed per vehicle, with luxury cars reportedly having up to 150 ECUs.

According to market research firm IHS, global automobile production is expected to decrease by about 1 million units in the first quarter of this year alone due to semiconductor supply disruptions. Consulting firm AlixPartners predicted that the resulting revenue loss in the automotive industry will reach $61 billion this year.

This content was produced with the assistance of AI translation services.