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World NewsElon Musk says the chip shortage is a ‘short-term’ problem

Elon Musk says the chip shortage is a ‘short-term’ problem

Tesla Motors CEO Elon Musk speaks to the media subsequent to its Model S.

Nora Tam | South China Morning Post | Getty Images

Tesla CEO Elon Musk stated Friday that the ongoing semiconductor disaster will likely be over by subsequent 12 months.

The tech billionaire stated he thinks chip shortage is a “short-term” problem versus a long-term one. 

“There’s a lot of chip fabrication plants that are being built and I think we will have good capacity by next year,” Musk stated at an Italian tech occasion that was streamed on-line Friday.

Musk didn’t specify which chip crops he was referring to.

Chip heavyweights Intel and TSMC have introduced plans to construct new crops in the U.S. however they will not come on-line for a number of years but.

Glenn O’Donnell, a vp analysis director at advisory agency Forrester, believes the shortage may final till 2023.

“Because demand will remain high and supply will remain constrained, we expect this shortage to last through 2022 and into 2023,” he wrote in a blogpost in April.

The world chip shortage has had a main affect on a big selection of industries, however the automotive sector has been significantly badly hit. Big names in the trade akin to Ford, Volkswagen and Daimler have all been compelled to droop manufacturing at numerous factors and lower their manufacturing targets as a results of a lack of chips.

Impact on Tesla

During the firm’s first-quarter earnings, Musk stated that Tesla had some supply chain issues, earlier than occurring to reference the chip shortage. 

“This quarter, and I think we’ll continue to see that a little bit in Q2 and Q3, had some of the most difficult supply chain challenges that we’ve ever experienced in the life of Tesla and same difficulties with supply chain, with parts — over the whole range of parts. Obviously, people have heard about the chip shortage. This is a huge problem.”

Consulting agency AlixPartners predicted this week that the chip shortage will value the automotive trade $210 billion in income this 12 months alone. 

“Of course, everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” stated Mark Wakefield, world co-leader of the automotive and industrial apply at AlixPartners, in a assertion.

Carmakers use semiconductors in all the pieces from energy steering and brake sensors, to leisure techniques and parking cameras. The smarter vehicles get, the extra chips they use.

In 2019, Tesla began producing vehicles with customized AI chips that assist on-board software program make choices in response to what’s taking place on the street.

Musk stated in July that manufacturing of Tesla’s Powerwall product, a backup battery for the dwelling, was “lagging” as a results of the chip shortage.

 

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