Jul 16, 2021 - Economy

Carmakers’ chip shortage that caused prices to soar may be ending

Sam Ro

Illustration of cars with a chip. — Illustration: Eniola Odetunde/Axios

Automakers may soon get a lot more of the chips they need to get cars for sale.

Why it matters: Winter weather, a fire and the COVID-19 pandemic have contributed to a shortage in chips that has stalled the production of new cars.

This disruption even affected the used car market where prices are surging so much that it’s distorting national inflation data.

Driving the news: Chip giant Taiwan Semiconductor reported its Q2 earnings on Thursday, and with it announced relief was coming for automakers in need of chips.

On a call with analysts, CEO C.C. Wei said its production of micro-controlling units for cars would be up 60% in 2021 compared to last year.
"By taking such actions, we expect the automotive component shortage from semiconductors to be greatly reduced for TSMC customers starting this quarter," he said.
Taiwan Semiconductor controls a little over half of the chip production market share as measured by dollar value.

Yes, but: Cars need as many as 1,400 different computer chips so it’s too early to say the auto industry is in the clear.

The bottom line: Supply chain issues are plaguing industries all over the world. So, it’s good news to hear things are at least improving.

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Carmakers’ chip shortage that caused prices to soar may be ending

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