World’s biggest chipmaker blames lack of tooling as the microchip shortage continues to bite
Whether your dealership is awaiting stock or your company car needs renewing, new comments from one of the world’s largest suppliers of microchips won’t make for pleasant reading.
Pat Geisinger is the CEO of Intel, the world’s biggest chipset maker by revenue, and he recently told US media that he expects the microchip shortage to “drift” into 2024 in the face of critical tooling shortages.
This is bad news for many of the world’s biggest carmakers, who are already struggling to supply product in the face of the unprecedented undersupply of chipsets across almost every manufacturing sector.
In fact, the reason for the glum prediction comes in the face of the news that Intel, which is amid a global ramp-up that includes a newly formed automotive division, can’t source the tooling needed to build chipsets… because it can’t source chipsets for the tooling.
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“That’s part of the reason that we believe the overall semiconductor shortage will now drift into 2024, from our earlier estimates in 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenged,” Geisinger told US news site CBNC.
Intel chipsets are used by automotive component giants Infineon and Bosch, amongst others, which means those companies are unable to supply OEMs with parts like ADAS controllers, engine control units, HVAC controllers and even engine stop/start modules.
The latter has led to Ford Australia compensating around 100 owners of two-litre turbocharged Ford Rangers, bought in 2021 but not fitted with the fuel-saving device as per the vehicle’s specification list.
Ford has written to owners of the affected cars, blaming the omission on “ongoing semiconductor shortages” and offering a $1,100 pre-paid credit card by way of recompense.
It is estimated that global vehicle production will be reduced by up 2.3 million vehicles in 2023, based on reported cuts to manufacturing schedules.
Bloomberg also reported a four per cent year-on-year fall in the volume of chipsets produced by Chinese companies in the first quarter of 2022, a result of severe and continued lockdowns in Shanghai, the hub of chip production in China.
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And while new car supplies continue to trickle through to local customers, vehicles hitting dealerships are not on the ground long enough for all pre-delivery work to be carried out.
Cars ordered before Christmas at a large Sydney dealer, for example, arrived in the last week of March and were sent directly to impatient fleet customers complete with protective plastic covers still on the seats.
“We would usually remove all of the travel plastic, but there’s just no time anymore,” a staff member told carsales.
