Cost-of-living crisis could ease chip demand

The semiconductor shortage could soon be a thing of the past, according to VCN Automotive.

It believes the cost-of-living crisis means consumers are not upgrading their smartphones or investing in new laptops in the same quantity as before, meaning chips will be more readily available to the automotive industry.

Tom Blackie, CEO, VNC Automotive, said: “It’s ironic that the very situation that triggered the shortage for much of the automotive industry should be driving the recovery, now that it has become reversed due to the prospect of recession. In fact, such has been the speed of the shift to oversupply that we are regularly approached by chip suppliers asking if we’d like to increase our orders.”

The automotive industry accounted for less than nine per cent of semiconductor volumes in 2020, worth an estimated $38.7bn. However, that is forecasted to rise to just over $116bn by 2030.

Blackie added: “It may still take some time for this freer-flowing supply to trickle down to car-buying consumers, as manufacturers work to clear the backlog that’s accumulated over the last couple of years. But in a time of economic gloom, it’s good to find a cloud with a silver lining.”