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High dependence on TSMC will prevent a quick solution to the problem of shortage of automotive chips
The scale of the impact of the current crisis in the semiconductor industry on car production has already been assessed by analysts more than once, but recent forecasts from IHS Markit indicate that the situation is far from improving. The average delivery time for components has increased to 26 weeks, and it is not necessary to count on the normalization of the situation before the fourth quarter.
Image Source: The Wall Street Journal
As noted by Seeking Alpha, citing a profile report by IHS Markit, published last week, due to interruptions in chip shipments in the second quarter, the global auto industry will reduce vehicle production by 1.3 million units. If in March experts hoped to eliminate the deficit by the third quarter, now they are postponing this period to the fourth quarter. Compared to February, component waiting times doubled from 13 to 26 weeks on average.
One of the reasons for the aggravation of the situation is the high degree of dependence (up to 70%) of the developers of microcircuits used in cars from contract manufacturers such as TSMC. Market leaders Renesas, NXP and Infineon either fully or partially commission TSMC with the production of their components. Microchip and STMicroelectronics competing with them, although they mainly rely on their own production, occupy no more than 12% of the global market, and therefore cannot significantly affect the situation. In normal times, the production of an average semiconductor component took from 12 to 16 weeks, and in conditions of a shortage of capacities, the terms increase, so there is no need to count on a quick solution to the problem, even if manufacturers are ready to actively expand the business.