Chip crisis likely to linger into 2024, says Intel chief

Fresh comments from the world’s largest supplier of semi-conductors won’t make for pleasant reading for anyone on – or planning to join – the growing waiting lists for a new car.

Intel CEO Pat Geisinger recently told US media he expects the global microchip shortage to “drift” into 2024 in the face of critical tooling shortages.

This is bad news for many of the world’s biggest car-makers, who are already struggling to supply product in the face of the unprecedented undersupply of chipsets across almost every manufacturing sector.

In fact, the reason for the glum prediction comes in the face of the news that Intel – which is already the world’s biggest chipset maker by revenue but is undergoing a global ramp-up that includes a newly formed automotive division – can’t source the tooling needed to build chipsets… because it can’t source chipsets for the tooling.

“That’s part of the reason that we believe the overall semi-conductor shortage will now drift into 2024, from our earlier estimates in 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenged,” Geisinger told US news site CBNC.

Intel chipsets are used by automotive component giants Infineon and Bosch, among others, which means those companies are unable to supply car-makers with parts like engine control units, driver-assist system controllers, climate control units and even engine idle-stop modules.

The latter has led to Ford Australia compensating around 100 owners of 2.0-litre BiTurbo diesel-powered Ford Rangers bought in 2021 but not fitted with the fuel-saving device as per the vehicle’s specification list.

Ford has written to owners of the affected cars, blaming the omission on “ongoing semi-conductor shortages” and offering an $1100 pre-paid credit card by way of recompense.

A wide range of other car-makers have also been forced to remove important tech equipment in Australian-delivered vehicles due to the global chip shortage, including Land Rover, Mercedes-Benz and Volkswagen.

Ford halted Mustang production in Michigan in January and Tesla has apparently delayed the release of its much-hyped Cybertruck due to the global supply chain breakdown.

It is estimated that global vehicle production will be reduced by up 2.3 million vehicles in 2023, based on reported cuts to manufacturing schedules.

Bloomberg also reported a four per cent year-on-year fall in the volume of chipsets produced by Chinese companies in the first quarter of 2022, a result of severe and continued lockdowns in Shanghai, the hub of chip production in China.

And while new car supplies continue to trickle through to local customers, vehicles hitting dealerships are not on the ground long enough for all pre-delivery work to be carried out.

Cars ordered before Christmas at a large Sydney dealer, for example, arrived in the last week of March and were sent directly to impatient fleet customers complete with protective plastic covers still on the seats.

“We would usually remove all of the travel plastic, but there’s just no time anymore,” a staff member told carsales.