The chip shortage is back for Year 2 and, the automotive industry continues to bear the brunt as semiconductor manufacturers continue to neglect their cheap chips. 

Nvidia Corp recently led a string of predictions from fellow chipmakers at the J.P. Morgan Tech Forum with its forecast for the chip shortage. With a consensus that there will be minimal improvement to the situation before the middle of 2022, maybe not even then.    

A somewhat alarming outlook for a sourcing issue that dates back to March 2020 but, of the endless problems thrown at companies by Covid-19, the global chip shortage appears to have been one of the most destructive. Companies should count themselves lucky to have avoided the disruption inflicted by the lack of chips which has caused backlogs for products, including vehicles, consumer electronics, and household appliances.

The global semiconductor shortage has caused carnage across the automotive supply chain, so much so that the everyday consumer has now become affected. Consulting Firm AlixPartners has estimated that the supply chain crisis has cost the industry a staggering $210 billion in revenue in 2021 alone. Shocking but not entirely surprising if you look at the growing list of OEMs that have had to either halt production or shut factories completely, including Daimler, Toyota, Ford, JLR, and most recently Opel.

As would be expected, there are continuing disputes over how long the shortage will last. The year 2022 is being cited by many industry professionals as the holy grail. However, such predictions indicate that there is going to be a definitive end to the draught. The truth is that there has been an imbalance in the semiconductor supply chain for many years now, far before the recent geopolitical shifts, natural disasters, and pandemics (of course). And with the car industry now rapidly pivoting to electric vehicles, attaining a semiconductor supply chain equilibrium seems almost impossible.