The global chip shortage that has curtailed car production over the past 12 months will ease by the end of this year as supply normalises, according to consensus within the industry.
However, there’s plenty of pain for new-car buyers to work through in the next few months as order banks continue to grow and manufacturers keep their focus on more profitable models.
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The chip shortage needs sorted out so that people can have their new cars and people like myself can have cheaper used cars. I don't see the market for used cars dropping in price until at least 2024.
The funny thing is that some lower marques seem to be very expensive right now for cars up to 3 years old (maybe further, I haven't looked that far back). And if you're lucky you can find a premium car for about the same as a Ford Focus of similar spec and age!
But when searching for a used car just recently it appeared to me that Vauxhall weren't affected by the price rises. Or maybe they had been and I just hadn't realised they were much cheaper. But where Ford were at premium levels, VW there too for a Golf, Mercedes for the A-Class, Vauxhall were far less.
The Asia based companies have long term strategic relationships with their suppliers, rather than the Western approach of "I need it cheaper next quarter". So guess what, in times of crisis who gets the parts??!!
In the '90s some IC manufacturers went on to allocation for their advanced parts and you'd have to wait to get your order. One problem then was that customers would then start placing orders with multiple suppliers trying to get their parts quicker. If they had X they'd place orders with Y different suppliers and it looked that there was demand for X*Y parts, whereas the reality was just X.
This time, however, it's very different. The lack of supply is across the board. It's not just microcontrollers for controlling seat functions, but voltage regulators, amplifiers, DSP, display controllers and processors. Lead times have shot up, last year some parts we buy were several months on lead. Same parts are now at one year. If we need to do a board for a customer we couldn't complete that order for another year. I say that, but we know of one supplier who still has the part that customer needs, but they've put their prices up to about three times the regular price!
Fabs (the fabrication facilities for semiconductors) take years to build so there is no quick fix. The UK lost the majority of its fabs years ago. Some never even opened such as the Hyundai plant in Dunfermline. Local politicians celebrated when it was knocked down, but just think how much demand there would be today even for an empty fab that could be pressed in to production quickly?
I hope the semiconductor shortage will be over soon, but predictions of it being just another year seems optimistic given how many parts are affected. There will definitely be a lot of hoarding as Musk states right now, but the value of these parts will limit hoarding to mostly generic parts with only limited extra stocking of the more expensive ones.
Seems like we are in similar industries. I nearly cried when I saw a local policitian saying we should invest £20 million to build a silicon fab plant in our region with much nodding of the fools around him. Clearly have no idea that it takes 18 months and £2 BILLION (100 times more) but probably got him a few more votes in next months election from the equally stupid.....
I'd heard it's more like £5bn to do a modern fab now. But yes, £20 million gets you a few machines for the plant out of the hundreds you'll need, never mind all the air purification and water treatments!
That was the sad part about the plant in Dumfermline, it had all the facilities just never had any machinery to produce a single chip. I did hear from others that it was an 8" fab and for a feature size considered too big for today. I find it strange that it wasn't a 12" fab considering the way the industry was going at the time, or that it couldn't be converted over as I'm sure other fabs must have been too.
Although Motorola / Freescale were doing something at the plant, but I don't know exactly what. I was working with a different group out of Motorola (doing academic research on other things).
I do find politicians (and Brexiters) a special kind of stupid.