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Chipmaker Drops Hint That Car Chips Will Continue to Sell Like Hotcakes

The demand for chips seems to be slowing down in some industries, but on the other hand, it remains at record levels for others.
The car production has been impacted by the lack of chips 6 photos
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For example, the latest statistics show that sales of smartphones and PCs are slowly declining year-over-year, finally giving chipmakers and other suppliers the opportunity of aligning production with demand.

But things aren’t by any means the same in other industry sectors, such as the car manufacturing business.

The demand here is still at record levels, and this is the reason some carmakers are still forced to temporarily halt production at some plants and even build vehicles without certain non-critical systems.

STMicroelectronics, which is one of the largest chipmakers in the entire world and a chip supplier for car manufacturers as well, says it expects the demand to surpass its production capacity until at least 2023. In other words, the company believes it wouldn’t be able to align the chip output with the orders it received, so as far as carmakers are concerned, the inventory would continue to be rather constrained until next year.

This is both good news and bad news.

While some carmakers expected the chip crisis to ease off in the second half of the year, there are more and more signs that this isn’t going to happen, and the struggle would continue until 2023.

Intel, on the other hand, believes that the constrained chip inventory would remain a problem for the car manufacturing business until 2024, especially as chipmakers themselves are now struggling with other problems on their own. One of them is related to the disruptions caused by the lockdowns announced by the Chinese government and which are impacting the supply chain, eventually hurting the production of chip-making equipment.

Clearly, anticipating when the chip shortage would come to an end is impossible, but STMicroelectronics doesn’t expect the demand to slow down until 2023. The company is also setting up a new plant in Crolles, France, therefore expecting to boost the output once the production lines go live.


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