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Carmakers Expected to See the Light at the End of the Chip Tunnel This Year

The chip shortage is still wreaking havoc in the automotive industry, and carmakers around the world continue to struggle with massive disruptions in their production.
The production of cars could return to normal at some point in 2023 6 photos
Photo: GM
GM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plantGM's Flint assembly plant
While some car manufacturers don’t expect the chip crisis to come to an end too soon, market research firm IDC believes otherwise.

In a recent forecast, IDC anticipates that the semiconductor supply will improve in the second half of the year before gaining more pace in 2023.

In other words, the industry is currently struggling with what could be the last wave of the chip nightmare, as the global inventory should then gradually return to normal, beginning with the second half of this year.

However, IDC warns this can only happen if, and this is a big if, the industry doesn’t hit another major roadblock, such as unexpected shutdowns caused by the health crisis.

Automotive semiconductors will continue to be a limiting constraint on the automotive market through the first half of 2022, but barring any unforeseen shutdowns or semiconductor manufacturing issues, supply should gradually improve through the second half of the year,” Nina Turner, research manager with IDC's Enabling Technologies and Semiconductor team, explains.

Adding in the time to manufacture the vehicle, this means the automotive market will begin to improve towards the end of 2022 and into 2023 if there are no other supply chain shocks.

Certainly, the forecast is good news for all carmakers out there, but on the other hand, IDC previously shared a rather worrying prediction. Due to the investments in production capacity, the industry could end up facing an oversupply of chips next year.

In other words, chipmakers could end up manufacturing more semiconductors than carmakers need, and this could once again lead to other disruptions in the market. Of course, everything depends on the global health issue, so right now, no forecast should be taken for granted.
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About the author: Bogdan Popa
Bogdan Popa profile photo

Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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