Chip shortage to value automakers $110 billion in revenues in 2021

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The world semiconductor chip scarcity will expense automakers $110 billion in lost revenues this yr, up from a prior estimate of $61 billion, consulting organization AlixPartners said, as it forecast the crisis will strike the manufacturing of 3.9 million automobiles.

The chip crunch has driven dwelling the have to have for automakers to be “proactive” appropriate now, and produce “source-chain resiliency” longer phrase to stay away from disruptions in the long run, the firm said on Friday.

Automakers have in the past experienced direct source agreements with producers of specified raw resources, which includes treasured metals this kind of as palladium and platinum, utilised in exhaust scrubbing units.

The a lot more direct solution to securing precious metal materials was released right after a offer and selling price disruption in that sector.

Automakers are now looking at producing direct relationships with semiconductor makers, claimed Mark Wakefield, co-leader of AlixPartners’ international automotive follow.

“These items are stunned into existence,” he reported.

Automakers have been hesitant in the previous to make lengthy phrase commitments to acquire semiconductors or other uncooked components and choose on the fiscal liabilities for such agreements, Wakefield claimed.

Now, “the threat is serious. It is not a prospective” possibility of getting rid of production to semiconductor shortages, he additional.

Separately, Ford mentioned on Thursday it is redesigning automotive sections to use extra accessible chips, in response to the world wide semiconductor lack.

Reporting by Ankit Ajmera in Bengaluru and Joe White in Detroit Enhancing by Amy Caren Daniel

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