Prices rise and consumers begin to slow down in anticipation of what may be a deep economic crisis. Something that, paradoxically, can help automakers overcome their great component crisis.
The pandemic, economic uncertainty, the Russian invasion of Ukraine and the energy crisis have placed the world in a very delicate situation. There are already few who deny the more than probable arrival of a crisis of enormous proportions as a result of a widespread inflation which is restricting consumption in a notable way.
Consumers know: it’s time to reduce spending or even save in anticipation of what may come, which is already being noticed in technological sectors such as mobile phones or computers.
“I think the scope of the change has definitely been greater than anyone expected”
These two sectors are the main microchip and semiconductor consumers. In addition, they are the ones that have enjoyed preference when it comes to receiving their orders, which has placed industries such as the automotive industry in a delicate situation in the last two years.
There weren’t chips for everyone and the car it has been one of the hardest hit, suffering component shortages and being forced to shut down factories, cut output and irritate buyers with months-long waits. Something that, on the rebound, has produced an unusual revaluation of the second-hand market.
The trend is reversed
Recently, General Motors admitted that it had 100,000 vehicles that could not be delivered due to lack of supply of some components. And they are not the only ones, because it is not in vain that it is a widespread problem in the industry.
However, things are beginning to change. We already told you at the beginning of June that the Spanish factories were beginning to emerge from the material supply crisis and now this trend is confirmed throughout the world.
One of the reasons is that demand for chips and semiconductors has plummeted as a result of inflation and the prudence that this has generated in the consumer, who is giving up the purchase of mobile phones and computer equipment, among other consumer goods.
Micron, one of the world’s leading chipmakers, has announced a significant cut in revenue forecast for the current quarter after two years of strong growth and demand.
“We think that demand has weakened considerably and we have seen it even in the areas that have been significantly constrained”Nikolay Todorov, an analyst at Longbow Research, told Reuters. “Micron will essentially start or indicate that the semiconductor cycle is turning.”
This has caused Micron to revise its production plans downwards, admitting that the situation has been reversed much faster than originally expected. “I think the scope of the change has definitely been greater than anyone expected”Micron chief commercial officer Sumit Sadana told Reuters. “Right now, these changes are rippling through the ecosystem.”
AMD, another large global manufacturer, has also publicly acknowledged the decline in demand. Furthermore, the actions of MediaTek, TSMC, ASML, STMicroelectronics and Infineonall of them chip producers, have also fallen on the stock market.
Auto industry on the rise
While car sales continue to trend negatively for the same reasons, this situation is beginning to benefit manufacturers as they see the huge bottleneck in which millions of vehicle orders are trapped beginning to widen.
“We expect a better supply of semiconductors in the second half of the year”Volkswagen AG Chief Financial Officer Arno Antlitz said Wednesday at the Reuters Automotive Europe conference. The demand for new vehicles may decrease, “but our supply will increase.”
And it is that the reduction in demand in the dominant sectors of the market for chips and semiconductors, that of mobile phones and computing, allows the automotive industry to become a preferred customer and still badly in need of supply.
“We are earning more than ever”Chief Executive Herbert Diess told a working meeting, adding that Volkswagen is increasing electric vehicle volumes in its biggest markets in Germany and China thanks to reduced shortages of semiconductors.
Now, the inflationary and energy crisis will end up hitting all sectors hard and the automotive industry is not going to get rid of that. At least, while the corporations prepare for the big blow, they can release a hitherto deeply mediated production due to the shortage of electronic components.
Font: Reuters