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The Chip Shortage Will Soon Be a Thing of the Past, Automaker Says

The chip shortage isn’t over yet, but on the other hand, it won’t be long before it’ll become just a thing of the past.
The production of cars could finally return to normal levels in 2023 8 photos
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Tata Motors Group CFO PB Balaji believes the chip crisis has already reached its worst level, which means that the automotive industry is now expected to gradually recover not only in the remainder of the year but also in 2023.

Of course, the whole thing won’t happen overnight, and it still depends on a series of other factors, such as the global health issue that could cause more problems in the supply chain.

But in the short term, the recovery will almost certainly happen, as the worst is over, Balaji explained.

Indeed, several carmakers expect the global chip shortage to come to an end, not necessarily this year but at least in 2023. The first signs of recovery would become more obvious in the second half of 2022 before it’d gain more pace in the first months of 2023.

For now, however, most companies are still handling the crisis as cautiously as possible, especially because the constrained chip inventory is causing disruptions in their production operations.

Hyundai, for example, is one of the optimistic companies in the industry, as the South Koreans expect the recovery to gain traction in the third and fourth quarters of the year. On the other hand, Ford says there’s a chance the chip struggle wouldn’t come to an end in 2022, so it’s now trying a different approach that would prioritize its most profitable models.

In other words, the American carmaker wants to use its existing chip inventory to manufacture the top-priority models, therefore trying to reduce the waiting times substantially.

Without a doubt, it’s hard to anticipate what will happen in terms of chip supply throughout the year, especially because the production of semiconductors still depends on a series of other unpredictable factors that could cause major disruptions in manufacturing.

 
 
 
 
 

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