ACEA leaders urge EU to address microchip shortage, add capacity
29 Oct 2021
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‘Warehouses are empty at a time when global vehicle sales are recovering from the Covid crisis’
Brussels – The European Automobile Manufacturers’ Association (ACEA) has called for a ‘concerted European initiative’ to enhance the European Union’s future semiconductor manufacturing capability.
In an 11 Oct letter to EU commissioner for internal market Thierry Breton, ACEA president Oliver Zipse said the continued shortage of semiconductor chips and the ensuing disruptions in the supply chain would have ‘critical repercussions’ for European car makers.
“Although the automotive industry uses only a relatively small percentage of microchips produced worldwide, the electrification of drivetrains and the digitalisation of vehicle functions are dramatically increasing our industry’s need for semiconductors,” said the letter.
The chips, said the letter, are ‘essential’ for many vehicles, particularly alternative powertrains.
“Since warehouses are empty, there is direct impact on the availability of microchips for our vehicles, at a time when global vehicle sales are recovering from the Covid crisis,” Zipse added.
The limited availability of vehicles, added to the rising prices of semiconductors, will impact consumer choice and the affordability of new vehicles, he warned.
To address the issue, Zipse called for both short-term and long-term support to resolve the ‘acute supply chain issue’.
In the short-term, the ACEA official urged the EU to secure reliable sources of supply for the complex, just-in-time and just-in-sequence production model of the automotive industry.
Over the long-term, he said ACEA supported the commission’s ‘intention to increase the production of semiconductors in the UE’.
“It is important, however, to ensure that such production plans include types of semiconductors that are used in motor vehicles,” he added.
This, he explained, means that in addition to the installation of ‘cutting-edge’ 2nm chip production in Europe, the manufacture of 14-28 nm chips, widely used by motor vehicles, “remains of paramount importance for our sector”.
According to ACEA, the "huge increase" in demand for computers, mobile phones and other consumer electronics during the global Covid pandemic surpassed the availability of semiconductors, making them very scarce.
In addition, supply chains are still being disrupted by national bottlenecks and coronavirus-related lockdowns in factories that produce microchips.
"When we take a closer look at the magnitude of the chip shortage’s impact on the auto industry, everything seems to indicate that this problem will persist for a long period of time, possibly even stretching into 2022," said Eric-Mark Huitema ACEA director general in a separate message.
"As a result, production volumes in Europe will likely be substantially lower than the recovery initially expected for this year and next," he noted.
Huitema said ACEA 'eagerly anticipated' the European Chips Act that the European Commission is slated to launch later this year.
The act is expected to “create a state-of-the-art European chip ecosystem, including production, that ensures our security of supply.”
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