Carmakers order enough chips for record rebound in global production


Carmakers are ordering enough semiconductors to build a record amount of vehicles when supply constraints ease, Europe’s largest chipmaker Infineon said on Tuesday.

“If you look at the current demand . . . in the auto industry where we have an excellent transparency to cars manufactured, the current orders look more like 110m to 120m cars [per year],” chief executive Reinhard Ploss told the Financial Times.

The previous record was reached in 2018, when 95m cars and vans were delivered to customers, according to Moody’s.

Since then, the global car market has shrunk, after being hit by an economic slowdown, the pandemic and the semiconductor supply crisis in quick succession.

The current shortage of crucial components, which has led to plants being shut around the world, could lead overall car production to slump to 77m in 2021, according to AlixPartners, almost 8m fewer units than it forecast before the bottlenecks took hold.

But Ploss said ordering patterns suggested carmakers might be looking to make up for lost production time in the coming months.

“There are many bits and pieces from which we can read the total market,” he said, singling out components such as microcontrollers, which are made for specific models and easy to track.

“If these numbers we see are representative, then the total ordering behaviour would represent a car demand between 110m and 120m.”

The Bavarian executive stopped short of suggesting that auto customers were stockpiling to prevent further shortages, but warned it was “very difficult to assess” whether this demand would be sustained once the semiconductor crisis eased.

“A significant portion [of the orders] is a catch-up and a certain portion is really added demand by buyers,” he said.

Separately on Tuesday, Infineon said it expected revenues for the 2022 fiscal year to rise by a “mid-teens percentage”, assuming exchange rates remained stable, with a “further margin uplift”.

The German group also announced it would invest a total of €2.4bn during the year, predominantly in updating equipment, up from a total of €1.6bn in 2021.

The former Siemens company last month opened Europe’s newest semiconductor plant in Villach, Austria, which will produce power chips primarily for auto customers.

While it was “very likely” that there would be a “phase of strong growth in semiconductors”, Ploss warned that the industry “will definitely not stay on the growth momentum we see today, which is, I think, driven by some specialist topic[s]”.

The auto industry accounts for about 8 per cent of the total semiconductor market, but more than 40 per cent of Infineon’s revenues.


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