VDA: Europe must make some plans for the chip shortage

VDA: Europe must make some plans for the chip shortage

The continuing semiconductor shortage is expected to lead to a 20 per cent drop in production worldwide in the automotive industry by 2026 - unless suitable countermeasures are taken.

This corresponds to about 18 million vehicles. This is the result of a study commissioned by the German Association of the Automotive Industry (VDA). According to the study authors, the shortage would already lead to a global production decline of 9 per cent in 2021.

Semiconductor demand in the automotive industry will triple by 2030, according to the study. However, the overall demand across all industries will only increase by a factor of 1.8 over the same period, which means that the growth in chip demand in the automotive industry is 1.7 times higher than the average of the other industries. The automotive industry is thus one of the hardest hit in a sector comparison.

The necessary supply share of chips for the automotive industry is expected to increase to 14 per cent of global semiconductor capacities by 2030. By comparison, the current market share is 8 per cent. The high demand is due in particular to the ramp-up of electromobility and an increasing share of driver assistance systems and functional enhancements up to autonomous driving.

The great demand for chips over 90 nanometres
Chips more significant than 90 nanometres are of enormous importance to the automotive industry. According to the study, this node size will account for about 60 per cent of the automotive industry's chip demand by 2030. Currently, however, less than 20 per cent of the announced capital expenditure in the global chip industry up to 2025 will be in node sizes of 65 nanometres or larger.

Currently, the focus of funding and investment is on components of 7 nanometres or smaller, such as microprocessors with higher computing power and improved energy efficiency.

Another study result: the automotive industry is expected to become the third most important chip customer after mobile communication and data storage by 2030. China has already recognised this. According to the study, Chinese semiconductor companies in particular are investing in node sizes of 90 nanometres or larger to boost domestic automotive companies.

To counteract an imminent sustainable decline in production in Europe and make the supply chain much more resilient, additional production capacities in the automotive-relevant node sizes in Europe should be pushed forward, the VDA said. The message is: "Expansion, expansion, expansion" along a comprehensible concept using pragmatic approval procedures.

"The EU Chips Act must now urgently be followed by action. Europe must now invest in the production of chips relevant to the automotive industry and ramp up the production of large chips," says VDA President Hildegard Müller. Only in this way can the semiconductor dependence on Asia be minimised and the resilience of the German and European automotive industries be strengthened. "And only then can the German and European automotive industry continue to play a leading role worldwide, secure prosperity and further advance climate-neutral mobility," Müller concluded.

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