Global Auto Industry Semiconductor Shortage Causes 124 Trillion Won in Damages

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] An analysis has emerged estimating that the global automotive industry's losses due to semiconductor shortages could reach $110 billion (approximately 124 trillion KRW).

According to Bloomberg on the 13th (local time), consulting firm AlixPartners estimated this, noting that the semiconductor shortage situation is worsening. AlixPartners nearly doubled its projected loss from $61 billion in January this year.

AlixPartners expects production disruptions caused by semiconductor shortages to reach 3.9 million vehicles this year. This is also nearly double the estimate of 2.2 million vehicles from four months ago. The 3.9 million vehicles represent 4.6% of the global vehicle production volume of 84.6 million units forecasted by AlixPartners for this year.

American automakers General Motors (GM) and Ford anticipate that the second quarter of this year will be the most severe period for semiconductor shortages.

However, AlixPartners does not expect signs of recovery until the end of this year. Mark Wakefield, head of the automotive division at AlixPartners, stated, "The semiconductor shortage will still be severe in the third quarter," and "there will be no recovery phase until the fourth quarter."

Production disruptions caused by semiconductor shortages are contributing to increased inflation risks in the United States. As vehicle supply decreases, prices for both new and used cars are rising.

U.S. automotive research firm LMC Automotive also expects global vehicle production to decrease by about 3 million units in the first half of this year due to semiconductor shortages.

As forecasts predict a prolonged semiconductor shortage, Ford CEO Jim Farley announced at the annual shareholders' meeting on the 13th that they are redesigning vehicles to use the most common and easily accessible semiconductors. CEO Farley also revealed plans to increase semiconductor inventory and to establish direct contracts with semiconductor manufacturers rather than through suppliers. He said, "We expect to see improvements in the second half of the year," and "We are beginning to have more confidence in semiconductor supply."

This content was produced with the assistance of AI translation services.