Rising chip prices is rare and comes at a time when the automobile sector is recovering from the COVID-19 pandemic.
(Mercedes Benz Newsroom)
Aman's key takeaways:
- While chipmakers have their own factories, most of them outsource production to companies like TSMC. Semiconductor demand from consumer electronics and data centers surged during COVID-19, leading to shortages.
- Automotive chip prices are expected to increase by several percentage points in the next few months before the demand stabilizes.
- Global automotive demand started to recover during Q4 2020, pushing the demand for semiconductors.
- During the last decade, the share of electronics in car cost has increased from 20% to 35%. By the next decade, it will increase to 50%.
- Prolonged shortage of semiconductors can lead to frequent plant shutdowns, impacting global automotive production.