Stellantis Sees Risk of New Chip Shortage on Demand Surge
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Stellantis NV expects semiconductor shortages to re-emerge on growing demand for electric vehicles at a time of increased geopolitical risk, making the current respite short-lived.
The risk of a return of severely stretched chip supply “will increase dramatically” in coming years as vehicle software functions balloon, according to Joachim Kahmann, who oversees semiconductor purchases for the Jeep maker.
In the last two years, the huge diversity of semiconductors in cars meant “we had multiple issues everywhere, and once we solved one topic, a new topic popped up,” he said July 18 in an interview. As Stellantis shifts to EVs requiring more complex chips and common platforms, any shortage “may impact not only one or two of our plants, but maybe five or six or seven.”
Protracted bottlenecks on semiconductor supply hit vehicle output during the pandemic. While the crisis may be mostly over, chip capacity remains constrained. The industry is also still subject to heightened geopolitical risk after China said it would restrict exports of two metals used in the semiconductor and EV industries.
To mitigate those risks, Stellantis is inking deals with Infineon Technologies AG, NXP Semiconductors NV and Qualcomm Inc., among others, and is setting up a semiconductor database with order plans that stretch years into the future. Stellantis expects to spend 10 billion euros ($11.2 billion) through 2030 to secure various kinds of semiconductors.
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Stellantis is among major carmakers transitioning to electric vehicles, which tend to use more chips than cars running on gasoline or diesel. The company last month unveiled plans for an EV costing less than 25,000 euros that’s due to go on sale early next year.
While Kahmann said China’s restriction on exports of gallium and germanium should be manageable, rising tensions with China “is definitely a topic.” The company is working to reduce reliance on chips from both China and Taiwan, he said.
For now, the chip situation “is much improved” with sufficient supply for the second half of the year, though it’s “just a matter of time” for the next bottleneck to come up, he added.
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