Korean Think Tank Contradicts Jaguar Land Rover, Says Chip Shortage Will Last Through 2022

A short time ago, the Indian-owned Jaguar Land Rover group announced they were confident that the current microchip shortage would be gone and behind them by mid-2022 at the earliest. It appears the Korea Automotive Technology Institute (Katech) doesn't share the same optimism.
Jaguar Land Rover 6 photos
Photo: Jaguar Land Rover
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First reported by The Korean Herald, the South Korean think tank has directly contradicted reports from sources inside the industry like Jaguar Land Rover. Reports that insist the microchip shortage directly caused by the effects of the ongoing global health crisis would see a relatively swift end to a shortage threatening to bring the global vehicle manufacturing sector to its knees.

Katech, which often consults with companies like Kia and Hyundai, predicted that at least 10.1 million vehicles would be taken out of production due to a dire lack of microchips vital to every single essential component of a modern automobile. Modern cars wouldn't even be able to start their engines without the necessary microchip components that, until recently, the industry had taken for granted.

This notion doesn't even factor in resource shortages in other critical fields of auto production. Not the least bit being the recent shortage of magnesium thanks to cutbacks in production in China, the largest national refiner of the metal. That, combined with a global economy perpetually on the brink of recession, it's difficult to fathom how even a relatively quick end to global shortages could possibly end before the next calendar year is out.

Using data gathered from reputable sources like IHS Markit, Katech announced that demand will increase from at least 132.5 billion chips in 2021 to 209.3 billion in 2027, showing an annual average growth rate of 8%. With resource shortages galore and without a long-term solution to compensate. It's very doubtful whether Jaguar Land Rover's more than optimistic outlook on the crisis is anything other than idealistic.
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Editor's note: Article contains images from previous AutoEvolution article


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