Some see 2Q as the 'trough' of the chip shortage, but lead times for key EV components remain long.
EV sales are on track to reach a projected 5 million vehicles this year, creating even greater demand for semiconductors in the midst of an ongoing chip supply shortage.
With battery-electric powertrains more than doubling vehicle chip content, market tracker IDTechEx forecasts that automotive electrification will this year add an additional $7.4 billion in demand for semiconductors. Competing with other pandemic-driven sectors like cloud computing and smartphones, most automakers have been forced to cut production.
Unrelenting semiconductor demand and the inability of foundry operators to ramp production has further delayed deliveries of key EV components. For example, IDTechEx reports lead times for microcontrollers extending by as much as 44 weeks.
Luckily, the supply situation looks less dire for power electronics, which make up about one-third of EV powertrains.
Electric vehicle manufacturers report mixed results in navigating the ongoing chip shortage. Ford, which this week announced a $11.4 investment in EV and battery production, said in April it would sell about 1.1 million fewer vehicles this year due to IC supply disruptions.
Toyota, which bolstered its chip supply chain to weather the early days of the pandemic, has since reduced vehicle production even as it seeks to transition from hybrid to all-electric models.
Meanwhile, EV leader Tesla claims to have largely ridden out the chip shortage via what IDTechEx said are new microcontroller designs and alternative MCU suppliers.
Then there’s a growing list of emerging EV makers targeting niches ranging from small “city cars” in China to luxury sedans and SUVs. The former category seeks to scale volumes, likely adding to the current chip crunch. The latter caters to a smaller but highly profitable status-symbol market.
Among them is Lucid Group, which this week opened the doors on its “advanced production plant” in Arizona that will produce the Lucid Air sedan. The EV maker claims more than 13,000 orders and expects to begin deliveries in October. It also claims Lucid Air has a range of 520 miles on a single charge of a 112-kWh battery pack.
Those and other examples prompt market trackers to forecast continued growth in the EV market as automakers navigate supply change challenges. Supporting that view, IDTechEx noted that Ford views the second quarter of 2021 as the “trough” of IC supply chain disruptions.
Still, gradual improvement in 2022 depends as much or more on reduced chip demand from the home-office sector rather than foundry capacity expansion, the market analyst said.
This article was originally published on EE Times.
George Leopold has written about science and technology from Washington, D.C., since 1986. Besides EE Times, Leopold’s work has appeared in The New York Times, New Scientist, and other publications. He resides in Reston, Va.