Automakers around the world have struggled with chip shortages since 2021, with estimates of normal chip availability returning this year. Things haven’t trended that way, however, leading to fears that the silicon supply-chain won’t return to normal levels until 2024.
Worldwide, carmakers are estimated to cut a total of 19.6 million vehicles out of their production schedules between 2021 and 2023. The automotive industry alone is estimated to account for 20% of worldwide demand for chips.

Automotive/industrial chip shortages expected to persist throughout 2022
(Source: Automoblog.net; click image for larger view)
Ford Motor Company is pointing this week to a shortage in chips has had them once again halt production, indicating this will ultimately impacting the Michigan automaker’s ability to deliver new vehicles to consumers. Ford blames “a 100,000 vehicle shortfall in its 2022 fourth-quarter volume on the inability to obtain enough chips.” Specifically in November 2022, Ford reported having “around 40,000 unfinished vehicles” sitting and waiting for the required silicon chips to become available, so clearly the situation is not improving quickly enough.

Automotive and industrial makers to will see chip shortage relief in late 2022 and early 2023
(Source: Gartner; Bain analysis; click image for larger view)
The issue isn’t limited to Ford. General Motors revised its plan to build 400,000 electric vehicles by the end of 2023, and now it hopes to meet that target about six months late. Toyota was also hit by shortages, deciding to temporarily halt production at no less than half of its domestic facilities throughout November. Late last year Toyota temporarily gave new car buyers only one smart key instead of two, seeking to ration semiconductors. Today, Japan’s Subaru dropped its car production by nearly 10% owing to the lack of chips pointing to the expected decline to impact the US market, where it sells two-thirds of its cars.
Not all automakers were hit as hard, and some found workarounds. Tesla is said to have weathered the chip shortage better than most, detailing how last October they were able to address some chip issues by rewriting its software to use different or fewer chips, disclosing they “buy about 1,600 different chips from 43 suppliers.”
Jaguar Land Rover returned to profit, as chip shortages eased at the end of 2022 for their manufacturers and production increased. This was much welcomed news in the UK, in light of a recent report from the Society of Motor Manufacturers and Traders (SMMT) that showed annual UK car production had fallen by almost 10% in 2022 against the previous year, due to global chip shortages.
While chip-availability related news currently is mixed overall, the reality is that acquiring required components is still tough for some vendors. Reuters recently reported that Ford’s Lawler described the current process as “‘hand-to-hand combat’ to get chips, and capacity was still constrained for the larger, older chips used in the auto sector.”
Help is on the way, however. In the US alone, 35 companies have pledged nearly $200 billion for manufacturing projects related to chips since the spring of 2020, according to the Semiconductor Industry Association, and similar operations are popping up overseas. German engineering outfit Bosch disclosed plans to invest over $3 billion dollars into their growing semiconductor business by 2026 in anticipation of an increased need for EV production, and their belief that silicon business is growing.
Today, Taiwan accounts for about 22% of total chip production and more than 90% of the most advanced chips made, according to industry analysts. With the “US Chips” initiative and US companies bringing manufacturing facilities online, the US expects its share of global production to jump to as much as 14% of global production by 2030, according to a 2020-published Boston Consulting Group study, according to the Semiconductor Industry Association.