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Supply chain disruption for semiconductors to the automotive sector

13 January 2021 Mark Fulthorpe

Since the back end of 2020 there have been reports of disruption within the supply chain of semiconductors to the automotive sector. Pressure built up as the automotive industry recovered from the widespread lockdowns experienced during the first half of 2020 and that recovery cycle clashed with increasing demand from the wider consumer electronics sector, which was itself recovering strongly and late in the year, building stocks for the holiday season.

As a result of these pressures, light vehicle manufacturers are finding increased disruption to the supply of systems using semiconductors in the first quarter. At this stage, with varying levels of visibility across the supply chain, the biggest volume disruption is noted in Mainland China where, based on available information, the risk could be 250,000 units in the first quarter. Additionally, in Europe, where less immediate detail is available, losses could total 100,000 units for this quarter. Production levels in North America, Japan and India are also expected to be negatively affected during the quarter. In other regions the risk is evident but it is less significant at this stage.

The situation is highly fluid. Currently there are varying estimates as to the length of the semiconductor shortage, with some suggestions that the situation will improve from the second quarter onwards, while some of the lower level disruption could even be recovered within the current quarter.

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