Bosch Says Auto Chip Bottlenecks Will Continue, As Some Forecasts Point To Early Relief

Transportation Bosch Says Auto Chip Bottlenecks Will Continue, As Some Forecasts Point To Early Relief Neil Winton Senior Contributor Opinions expressed by Forbes Contributors are their own. New! Follow this author to improve your content experience. Got it! Jul 13, 2022, 07:59am EDT | Share to Facebook Share to Twitter Share to Linkedin 3d illustration of microchip over white background with car and binary code inside getty Bosch , Europe’s largest auto supplier, said it expects global bottlenecks because of a shortage of auto chips to continue into 2023.

Global automakers have been bracing themselves for continuing problems meeting strong demand because a shortage of crucial semiconductors led to a buildup of unfinished cars and SUVs. Late last month, Mercedes-Benz reiterated what seemed a general industry view on the shortage of chips, saying it will last through 2022 and into next year. But in July, some reports suggested this shortage might have already ended because high inflation, China’s Covid lockdown, and Russia’s invasion of Ukraine had bitten lumps out of demand.

According to Reuters, this was also caused by an over-ordering of chips finally catching up with damaged demand. And Berenberg Bank, in a report published this week, said semiconductor shortages for the automotive industry were likely to ease by the end of 2022. Global consultants AlixPartners, in a recent report, said things would be bad until 2024.

“Chip supply increases but remains a constraint on pent-up demand-driven sales through 2024, continuing the operating inefficiencies while re-shoring and resiliency costs rise,” AlixPartners said. But Bosch was unwilling to call an early end to the crisis. “For (auto) semiconductors there are areas where demand continues high and there will still be some bottlenecks in these areas where this problem will still be relevant in 2023 but will see some improvement in 2023,” said Stefan Hartung, chairman of the board of management, at Bosch Tech Day 2022 in Dresden, Germany.

MORE FROM FORBES VETTED Get The Apple Watch Series 7 At Its Lowest Price Ever For Prime Day Before It’s Completely Sold Out By Kari Molvar Forbes Staff The Best Prime Day Deals Under $25 By Anna Perling Forbes Staff This will also be true for the consumer industry as well as autos, Hartung said. The chairman of the board of management of German technology company Bosch Stefan Hartung addresses . .

. [+] media at the Bosch semiconductor manufacturing plant in Dresden, eastern Germany, during the company’s so-called “TechDay” on July 13, 2022. (Photo by JENS SCHLUETER / AFP) (Photo by JENS SCHLUETER/AFP via Getty Images) AFP via Getty Images By 2026, Hartung said Bosch plans to invest another €3 billion in its semiconductor division as part of the funding program on microelectronics and communications technology.

“Microelectronics is the future and is vital to the success of all areas of Bosch business. With it, we hold a master key to tomorrow’s mobility, the internet of things, and to what we at Bosch call technology that is ‘Invented for life’,” said Hartung. In 2021, Bosch overall research and development spending was €6.

1 billion and would rise to €7. 0 billion in 2022, according to Hartung. This represented just under 8% of sales.

Berenberg, the Hamburg-Germany based-bank, said in its report the news about semiconductor inventories showed them moving in the right direction. “Most semiconductor companies blame logistics, including container availability, staff shortages and COVID-19 lockdowns for recent supply tightness. However, our survey indicates that semiconductor inventories have increased since our (last poll in) February.

The reasons cited include softer demand for smartphones, consumer electronics and some industrial applications, confirming anecdotal reports of better automotive industry chip availability,” the report said. There is growing optimism for a recovery in the 2 nd half of 2022. “The semi industry’s most pressing challenges may have peaked.

More respondents expect semi shortages to ease by the end of 2022, as compared to the February survey. Respondents also expect continued improvement from here, rather than exhibiting further deterioration prior to a rebound. Our findings corroborate management teams at many automotive (manufacturers), that expect improving semiconductor availability in Q3 and Q4 2022,” the report said.

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