Semiconductor Shortage: Auto Industry Faces 20 Percent Drop In Production

by | 27. Jan 2023 - 12:47 | Economy

EU Chips Act must promote automotive-relevant semiconductor chips, demands German Association of the Automotive Industry.

The worldwide semiconductor shortage continues to hold the automotive industry in its grip. If the crisis persists, the industry faces a 20 percent drop in production by 2026, equivalent to around 18 million vehicles, the German Association of the Automotive Industry (VDA) is now warning. Global production had already fallen by nine percent by 2021. This is the result of a study commissioned by the industry association.

By 2030, demand for semiconductors in the automotive industry will triple, it continues, the largest increase in an industry comparison, due primarily to the ramp-up of electromobility and the increasing share of driver assistance systems through to autonomous driving. The automotive industry will become the third most important consumer of chips by 2030, after mobile communications and data storage. China, for example, has already recognized this, according to the study, because semiconductor companies there are increasingly investing in automotive-relevant chips.

Europe, too, must expand production capacities, the VDA demands, in order to counteract the impending decline in production, strengthen the supply chain and minimize semiconductor dependence on Asia. The announced European Chips Act must urgently be followed by action, said VDA President Hildegard Müller. This is the only way the German automotive industry can maintain its global leadership, secure prosperity and further advance climate-neutral mobility.

Photo: iStock/gopixa

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