Chip shortage could overshadow Covid

The global semiconductor shortage could have a greater impact on the automotive industry than the Covid-19 pandemic.

That is the view of founder and CEO of software provider VNC Automotive, Tom Blackie.

He said: “In conversations with clients and suppliers, it’s become clear that the effects of the semiconductor shortage will long outlast the pandemic, and will potentially have a far more serious impact on sales and future development.

“Some of our suppliers are seeing prices for chips that are more than 30 times higher than before, and at that level, their use is no longer sustainable. We’re even seeing vehicle buyers and fleet operators having to consider purchasing models that aren’t on their preferred lists because that’s all that’s available. At a time when the industry is asking people to consider making the switch to EVs, supply restrictions are leaving them frustrated.”

He continued: “Suppliers and OEMs may now be forced to simplify their designs to use fewer complex components that are still available, and we’re concerned this will lead to a reduction in functionality at a time when consumer expectations have never been higher. It’s also possible that systems hurriedly-adapted to use a simpler component set may quickly be left behind as future generations of mobile phones cease to support the older platforms they may be built on.”