Samsung Electronics warned it is unable to predict its’ 2022 financial performance because of the continuing shortage of computer chips. Maruti Suzuki India, that nation’s largest car maker, predicted fewer sales next year. 
Fanuc, a major Japanese robotics company, also lowered its financial forecast.
“We are receiving a lot of orders but can’t increase production to meet them because we just can’t procure the necessary parts,” Fanuc CEO Kenji Yamaguchi said in an investors call quoted by Bloomberg. 
General Motors faces the same situation, CEO Mary Barra said in a Bloomberg interview. “We are selling every vehicle we can make,” she said.
The chip shortage will cost the company sales until mid-2022, she predicted. 
Ford Motor Co. will produce below capacity through 2022, according to CFO John Lawler, who added that the chip scarcity could last into 2023.
“We didn’t expect to lose so much production in the second quarter due to chips or that the commodity prices would shoot up,” Maruti Suzuki Chairman R.C. Bhargava said in a 28 October earnings call quoted by Bloomberg. 
“What we had expected in terms of volumes and profitability has changed substantially,” he noted.
Last week, Germany this week slashed its 2021 growth forecast from 3.5 percent to 2.6 percent, largely because the chip shortage has crippled vehicle production.
“The lack of chips has meant that hundreds of thousands of cars cannot be finished and delivered,” economy minister Peter Altmaier said in a news conference last week.
The world’s semiconductor manufacturers have pledged to invest at least $700 billion through 2030 to expand production capacities.
TSMC, the world’s richest chipmaker, will spend $100 billion to expand capacity through 2023, but “we expect TSMC’s capacity to remain very tight in 2021 and throughout 2022,” CEO C.C. Wei said to Bloomberg.
Chip pioneer Intel Corp. plans to invest in new manufacturing capacity, as does Samsung, which announced plans to triple its productive capacity  by 2026. 
“Even though it’s difficult to say definitively, we are carefully hoping that perhaps the situation may start to somewhat ease from the second half of next year,” Jinman Han, Samsung executive vice president, said in an earnings call last month quoted by Bloomberg.
Governments in China, Japan, and South Korea have all called for new  investments in their domestic chip-making industries.
President Joe Biden’s original “Build Back Better” plan included $50 billion to expand U.S. chip-making capacity as a strategic investment in an essential industry.
TREND FORECAST: Biden’s call for an investment in the U.S. semiconductor industry does little to boost production in the short term.
Chips will remain in short supply at least through 2022. Production will increase, but demand will rise by at least as much, leaving the world chronically short of chips until companies can expand existing plants or build and equip new ones, a process requiring years.
As we have noted, the nations that will experience the strongest economic rebound are those that will become the most self-sufficient; producing what they need and cutting their dependence on overseas markets. And as we noted a year ago, China, with its dual circulation policy is trending in that direction. 

Comments are closed.

Skip to content