Automobile chip shortage to ease slightly in Q3

The shortage in automobile chips that started late last year is expected to ease slightly starting in the third quarter of 2021, according to market research firm IHS Markit.

Automobile OEMs around the world suspended their car production multiple times in the first half due to the shortage.

This trend will continue in the third quarter, the their production drops won’t be as bad as it was in the first and second quarters, the research firm said.

According to IHS Markit, OEMs will be able react to the shortage better as they set their production timeline flexibly. 

Semiconductor fabs will also recover their production volume in the second half of the year that will ease the shortage, the research firm said. Multiple fabs were shutdown in the first half due to power outages and natural disasters.

Renesas restarted its fab that was shutdown from fires last month. Shipment from the fab is expected to return to normal levels by July.

NXP, which shutdown its fab in Austin from cold weather there also restarted production back in April. 

Fabs in Taiwan has suffered from power outages due to the droughts and power outages but raining has returned to normal levels in June, which is an optimistic sign towards normalization, IHS Markit noted.

The research firm expected full normalization of the automobile chip supply chain to occur in the first quarter of 2022.