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Chip crisis: 100 billion damage for the automotive industry
Simonluca Pini - Sole 24 Ore Contributing Editor
The bill will reach almost 100 billion Euro by the end of 2022, with around 18 million vehicles unable to be produced due to a shortage of semiconductors
What is the cost of the semiconductor shortage to the European automotive industry? Several years ago, the lack of microchips was not among the challenges faced by the automotive industry. However, today the bill has reached unimaginable levels. The German credit insurance company Allianz Trade reported losses of EUR 50 billion in 2021 and another EUR 47 billion could be lost because of chip shortages in 2022. As a result of the low production of semiconductors in the region, the European automotive sector was most severely affected, costing Europe around EUR 100 billion between 2021 and 2022. Furthermore, it is important to remember that the number of microchips in a car is approximately 3,000. Germany is the most affected country among the largest European countries: Allianz Trade estimates 47.5 billion losses in the German industry (25.3 in 2021 and 22.3 expected for this year). The reason is related to the high weight of automotive on the country's GDP. As for the other major European nations, France could take a 7.2 billion hit, the UK 6.8, Italy 6.4 and Spain 6.3. As well as quantifying the economic damage, the study by the German credit insurance company Allianz Trade estimated that the chip shortage resulted in a shortfall of approximately 18 million vehicles worldwide.
Semiconductor shortage: the causes
Why are there no chips for cars? In 2020, car manufacturers reduced their stocks and orders of semiconductors due to restrictions imposed by the Coronavirus pandemic, which caused production across Europe to halt. The decision by chip manufacturers to allocate capacity to high-growth segments, such as consumer electronics, servers and PCs, allowed manufacturers on the old continent to rely on reduced quantities once the demand for cars and related orders began to increase. Asian manufacturers also faced several closures due to the pandemic. Taiwan leads the world in terms of microprocessor production with a 65% share, followed by Tsmc, which produces 3% of chips for the automotive industry and the rest for the telephone, PC, and telecommunications industries. As a result of restrictive lockdowns in China and the consequences of the Russian invasion of Ukraine, the supply chain experienced new disruptions in 2021 and 2022 in addition to the fire at the Renesas Electronics plant, one of the leading manufacturers of semiconductors for the automotive industry.
Semiconductor shortage: the causes
Why are there no chips for cars? In 2020, car manufacturers reduced their stocks and orders of semiconductors due to restrictions imposed by the Coronavirus pandemic, which caused production across Europe to halt. The decision by chip manufacturers to allocate capacity to high-growth segments, such as consumer electronics, servers and PCs, allowed manufacturers on the old continent to rely on reduced quantities once the demand for cars and related orders began to increase. Asian manufacturers also faced several closures due to the pandemic. Taiwan leads the world in terms of microprocessor production with a 65% share, followed by Tsmc, which produces 3% of chips for the automotive industry and the rest for the telephone, PC, and telecommunications industries. As a result of restrictive lockdowns in China and the consequences of the Russian invasion of Ukraine, the supply chain experienced new disruptions in 2021 and 2022 in addition to the fire at the Renesas Electronics plant, one of the leading manufacturers of semiconductors for the automotive industry.
