Automotive Giant Semiconductor Procurement Manager: Surge in Demand for Electric Vehicles, Shortage of Chips Expected to Resurface

Stellantis, the world's fourth-largest automaker and European car manufacturer, has recently projected that the shortage of automotive chips will reoccur due to increased demand for electric vehicles, and the current relief is only temporary. With the explosive growth of automotive software functionality, the risk of chip shortages in the coming years will significantly increase, and the next chip crisis is only a matter of time. With the development trend of intelligent and electric vehicles, the number of chips required per vehicle is increasing. By 2030, it is estimated that each vehicle will require up to 1,000 chips, and by 2035, the number may reach 3,000 chips, indicating a massive demand. In contrast, producing a traditional car requires 500 to 600 chips. Joachim Kahmann, the semiconductor procurement director at Stellantis, stated that in the past two years, the significant diversity of semiconductors in the automotive industry has meant that multiple issues exist everywhere. Solving one problem leads to the emergence of new ones. As Stellantis transitions to electric vehicles, it requires more complex chips and universal platforms. Any shortage may not only affect one or two factories but could potentially impact five, six, or even seven factories. Since the second half of 2020, the shadow of "chip shortage" has loomed over the automotive industry, and the scarcity of chips has become a true reflection of the industry. Some car companies have even formed special teams to "grab chips" from chip factories to ensure supply. According to AutoForecast Solutions, a data forecasting company in the automotive industry, the global production of cars reduced by nearly 4.5 million units in 2022 due to the "chip shortage," which is more than the annual new car sales in the Japanese market. Additionally, industry insiders estimate that the chip shortage has led to a global production reduction of approximately 15 million vehicles in the three years since the outbreak of the pandemic, with China accounting for over 2 million of those vehicles. Kahmann pointed out that the current chip shortage crisis has largely ended, and the chip situation has "greatly improved," with sufficient supply expected in the second half of the year. However, chip production capacity is still limited, and geopolitical risks are intensifying, leading to significant uncertainty in the future. To mitigate supply chain risks, Stellantis is signing agreements with companies such as Infineon, NXP Semiconductors, and Qualcomm. Additionally, they are establishing a semiconductor database that includes future years' order plans. Stellantis is also collaborating with AiMotive and SiliconAuto to develop its own semiconductors. Stellantis expects to spend €10 billion (approximately $11.2 billion) by 2030 to ensure the supply of various semiconductors. Industry analysts believe that the shortage of automotive-grade chips was due to the halt in manufacturing in Southeast Asia caused by the pandemic and the relatively low return on investment, which resulted in semiconductor manufacturers' lack of enthusiasm for automotive-grade chips. The upfront investment, long verification cycles, and high difficulty of automotive-grade chips have led to a comprehensive high-cost supply system between semiconductor manufacturers and automakers.