BMW AG expects the global shortage of semiconductors hindering auto production to be resolved, as companies and governments zero-in on the issue.
“There’s intense focus on the issue globally, so it’s to be expected for supply and demand to be back in balance within two years at the latest,” BMW chief executive officer Oliver Zipse said in an interview on Thursday at the company’s driving academy near Munich, Germany.
A lack of chips used in everything from navigation systems to certain rear-view mirrors has forced automakers to curtail production just as demand picks up in major economies that are easing COVID-19 pandemic restrictions.
Photo: Reuters
While Ford Motor Co last month estimated the scarcity of semiconductors would slash earnings by US$2.5 billion this year, BMW has only reported limited stoppages at two European plants thus far.
Zipse’s optimistic view contrasts with some of his peers.
Renault SA CEO Luca De Meo on Thursday said the chip crisis has exposed the “frightening” fragility of complicated supply lines where whole industries depend on highly specialized manufacturers.
What were valid strategies 20 years ago should be revisited, he said.
Volkswagen AG cautioned the semiconductor shortage would become more pronounced in the second quarter, though it still raised its full-year earnings outlook.
BMW yesterday sent a similarly upbeat message, saying it expects automotive returns to reach the upper end of its 6 to 8 percent forecast.
Strong demand spreading from China to the US and Europe is helping offset higher prices for raw materials such as copper.
The chip shortages that arose after consumers snapped up electronic gadgets en masse while confined at home have spurred broad efforts to boost production. The European Commission plans to double the bloc’s chip production to at least 20 percent of world supply by 2030, a move that would reduce its reliance on foreign companies for the critical components.
US President Joe Biden has vowed to better secure the US’ supply chain by reviving domestic chip manufacturing.
Taiwan Semiconductor Manufacturing Co (台積電) plans to spend as much as US$28 billion on new plants and equipment this year.
While waiting for investment programs to gather pace, manufacturers have had little choice but to idle plants or take the unusual step of stripping certain high-tech features from select models.
Zipse said BMW has no plans to seek new partnerships or joint ventures despite current restraints.
“For critical components, we’ll stick with long-term supply contracts and a range of different partners,” he said.
This will include battery cells critical to accelerating BMW’s rollout of electric vehicles.
“From our point of view, we’ve covered the necessary supplies with long-term contracts,” he said.
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
RSS