The Auto Industry Faces Semiconductor Supply Shortages... The First Half of This Year Is No Easier

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[Asia Economy Reporter Ki-min Lee] Due to the prolonged semiconductor supply shortage, the production volume of completed car manufacturers decreased last year. Although the semiconductor supply situation is expected to recover this year, demand is anticipated to increase due to competitive semiconductor pre-orders by electrification and completed car manufacturers, making it difficult for supply to keep up with demand until the first half of the year.

According to the completed car industry on the 2nd, this year's orders for automotive semiconductors have been overbooked by 20-30% compared to production capacity, and companies are already taking orders for next year.

Previously, companies purchased 2-3 months' worth of semiconductors to produce vehicles, but due to the semiconductor shortage, completed car manufacturers are now demanding semiconductor supply on a yearly basis.

Additionally, as global completed car manufacturers actively launch electric vehicles that require about three times more semiconductors than internal combustion engine vehicles, semiconductor demand is expected to increase.

In fact, cumulative electric vehicle sales through the third quarter of this year reached 3,012,579 units, an increase of over 800,000 units compared to 2,200,411 units last year.

The automotive industry and the government expect the semiconductor supply situation to normalize by the second half of this year.

Deputy Prime Minister for Economy Hong Nam-ki recently stated at the External Economic Security Strategy Meeting, "The shortage of automotive semiconductors, which has been difficult since the beginning of the year, is gradually easing, but it will take some time before normalization." The government plans to respond through rapid customs clearance of automotive semiconductors and discovering alternative items.

Global completed car manufacturers are not only adopting long-term semiconductor ordering methods but are also jointly engaging in new semiconductor research and development (R&D) and internalization with semiconductor companies.

Ford and GM, among others, have started joint development of general-purpose semiconductors with semiconductor companies such as GlobalFoundries, NXP, Qualcomm, and TSMC. They plan to secure quantities by directly purchasing the jointly developed semiconductors.

In the case of Stellantis, they are cooperating with Foxconn in the design and production of special microcontroller units (MCUs). Leading electric vehicle market players such as Hyundai, Toyota, Tesla, and Volkswagen have also announced strategies to internalize semiconductors.

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