Automakers are short of chips until at least the end of 2023

The global auto industry will suffer a semiconductor shortage next year as the transition to electric vehicles accelerates, leading auto groups and chip manufacturers have warned.

Hassan El-Khoury, CEO of US-based chipmaker Onsemi, said the company has already “run out” of silicon carbide (SiC) wafers, an advanced power semiconductor largely used in electric cars, at least until the end of 2023 due to strong demand. .

“There is nothing you can do now to change 2023,” said the head of one of the world’s leading chipmakers. “We will add capacity quarterly and every month in 2023 to meet our customer demand.”

Jochen Hannebeck, CEO of auto chip maker Infineon, issued a similar warning about supplies at an event in Munich recently. “I expect a very long short,” he said.

And automakers are preparing for trouble. Carlos Tavares, CEO of Stellantis, the world’s fourth-largest automaker by sales, said chip limitations will continue to haunt the auto industry next year.

The demand for automotive chips has been boosted by manufacturers such as Onsemi and Infineon as well as STMicroelectronics, NXP Semiconductors and Nexperia.

Infineon last month raised its forecast for revenue growth from 9 percent to more than 10 percent in the coming years, without giving a specific timeframe.

The German chipmaker also announced its largest single investment of €5 billion to build a plant in Dresden to produce analog, mixed-signal and power semiconductors, used in automobiles and other industries.

Al-Khoury said Ansimi was expanding production at plants in Ronov in the Czech Republic, Busan in South Korea and New Hampshire in the United States, which the company estimates will increase production capacity by 30 percent next year.

“We have a lot of customers under so-called long-term supply agreements, and we’re building the capacity to support those first,” he added.

The demand for automotive chips has been fueled primarily by the more fuel-related functions of fuel vehicles and the shift to electric vehicles, which is likely to accelerate further as combustion engines are phased out.

The shift from combustion engines to electric cars has been “unstoppable,” said Greg Lowe, CEO of Wolfspeed, a leading supplier of SiC substrate materials, which are used to make SiC wafers.

“What we expect is that through the end of this decade, power semiconductors — specifically silicon carbide semiconductors — could experience a compound annual growth rate of 14 percent, which means we’re all going to be working as fast as we can, trying to keep up with demand.”

Automotive chips’ optimistic outlook contrasts with other parts of the sector, which supplies semiconductors for smartphones and personal computers.

Those groups, which include Taiwan Semiconductor Manufacturing Company (TSMC), Intel and Samsung, have suffered from a drop in demand.

TSMC, the world’s largest chip maker that supplies companies like Apple, Google and Amazon, has cut its planned capital expenditures by about 10 percent to $36 billion this year.

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