The semiconductor shortage that has plagued the automotive industry for much of the last two years may soon be turned on its head, says in-vehicle connectivity pioneer VNC Automotive, as a lack of chips critical for high-tech features suddenly becomes a glut.
“It’s ironic that the very situation that triggered the shortage for much of the automotive industry should be driving the recovery, now that it has become reversed due to the prospect of recession,” says Tom Blackie, CEO, VNC Automotive.
Disruptions in the supply chain caused by a series of disasters at critical production plants were compounded by a huge increase in demand for electronic devices as the pandemic took hold and working-from-home became the default for many.
However, with a global recession on the horizon and a cost-of-living crisis beginning to bite, consumers have been quick to rein in their spending. Instead of upgrading to the latest smartphone or ordering a new laptop on credit, canny buyers are choosing to hang on to their existing devices for longer.
This fall in demand for consumer goods has freed up production capacity throughout the supply chain, from chip fabs through to logistics, and the automotive industry has been quick to take advantage.
Leading executives of motor manufacturers have said this year they did not think that ‘normal’ production would resume until 2023 or even 2024, depending on their models and use of micro-chips, but there has been a gradual increase in output around the world, led by the expansion of electric cars’ sales.
