Photo: General Motors
The chip shortage that showed up totally out of nowhere back in 2020 was originally supposed to be over by the end of the year. Many industry experts believed the constrained inventory would only be temporary, anticipating a return to normal in just a few months.
This obviously didn’t happen, and many industry watchers then believed the global chip supply would recover in 2021, once again projecting pre-2020 levels by the end of the year.
The same story once again, and in 2022, many analysts believed all problems would be over by December 31 because of the aggressive investments in chip capacity. And here’s the month of November ready to prove otherwise, as carmakers continue to struggle with the very constrained semiconductor inventory.
While Ford and General Motors both believe the chip shortage would continue through 2023, an industry expert thinks the whole thing could get a lot worse.
John Sicard, CEO of supply chain management firm Kinaxis, has recently said in an interview that the semiconductor crisis would continue not until 2023 or 2024 but until 2027. The earliest the chip shortage can be resolved is 2025, he said, but on the other hand, there’s a chance it’d take the world up to five years to align the chip production with the demand.
Of course, this can’t be good news for automakers worldwide, especially as they are now striving to minimize the disruptions caused by the chip shortage in their daily operations.
Toyota, for instance, has recently decided to no longer ship two smart keys to buyers in Japan but only a single one alongside a mechanical version. This approach is an attempt to reduce the number of chips used in car keys, with Toyota planning to provide customers with a second electronic key when the chip supply improves.
In the meantime, Ford too struggles with the constrained supply, but the company says it should be able to ship all its unfinished vehicles to dealerships by the end of the year.
The same story once again, and in 2022, many analysts believed all problems would be over by December 31 because of the aggressive investments in chip capacity. And here’s the month of November ready to prove otherwise, as carmakers continue to struggle with the very constrained semiconductor inventory.
While Ford and General Motors both believe the chip shortage would continue through 2023, an industry expert thinks the whole thing could get a lot worse.
John Sicard, CEO of supply chain management firm Kinaxis, has recently said in an interview that the semiconductor crisis would continue not until 2023 or 2024 but until 2027. The earliest the chip shortage can be resolved is 2025, he said, but on the other hand, there’s a chance it’d take the world up to five years to align the chip production with the demand.
Of course, this can’t be good news for automakers worldwide, especially as they are now striving to minimize the disruptions caused by the chip shortage in their daily operations.
Toyota, for instance, has recently decided to no longer ship two smart keys to buyers in Japan but only a single one alongside a mechanical version. This approach is an attempt to reduce the number of chips used in car keys, with Toyota planning to provide customers with a second electronic key when the chip supply improves.
In the meantime, Ford too struggles with the constrained supply, but the company says it should be able to ship all its unfinished vehicles to dealerships by the end of the year.
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