Demand for chips will present divergent trends in 2022, as automotive chips will remain in short supply and consumer electronics makers are reportedly scaling down their chip demand, according to industry sources.
There was speculation that the auto industry could see chip supply improvements as a result of dropping demand in the consumer electronics sector, but the sources noted that car-grade chips cannot be replaced by ones used in consumer electronic devices.
Over the past year, auto and consumer electronics makers have often struggled for chip supplies. Automakers had been too conservative in their forecasts about economic recovery, prompting chip suppliers to switch parts of their production capacity to support consumer electronics and industrial applications. When automakers later tried to get back their support, consumer electronics makers would not give in.
However, the situation in 2022 will be different, they said. Chip suppliers have hiked prices and required advance payments from clients with long-term contracts, and the auto industry has almost entirely restored their previous chip support.
Nonetheless, even if automakers managed to restore all the car-chip production capacity around the world, car chip shortage will remain.
Vehicle electrification has driven up the need for chips, as an electric vehicle (EV) needs 200 more chips than a traditional fossil fuel car.
