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Tag: automobile

  • Intel CEO says chip shortage will continue throughout this year

    Intel CEO says chip shortage will continue throughout this year

    As many of you know, we are in the middle of a chip shortage that has been impacting automobile and consumer electronic manufacturers. Intel CEO Pat Gelsinger sees the shortage continuing throughout the remainder of this year, bottoming out during the second half of 2021 before things start to improve. In fact, the executive doesn’t expect the supply-demand picture to return to normal until 2023.

    Gelsinger said, “I don’t expect the chip industry is back to a healthy supply-demand situation until ’23. For a variety of industries, I think it’s still getting worse before it gets better.” Last month, we told you that the lead time, the time it takes between placing an order for semiconductors and actually receiving them, hit 17 weeks in April; that was the longest lead time recorded by Susquehanna Financial since 2017 and was a big jump compared to the previous year’s 12.53 figure.

    Unlike fabless manufacturers like Apple, Qualcomm, MediaTek, and others, Intel owns its own factories (aka fabs, short for fabrication plants). A company like Apple designs its own chips, but without the means to manufacture them itself, the company turns to the world’s largest contract foundry, Taiwan Semiconductor Manufacturing Company, Limited (TSMC Ltd.) to produce them.

    Gelsinger says that thanks to Intel’s ownership of its fabs, it is more able to keep up with demand for chips than those who are outsourcing production to another foundry. The executive says that demand for chips will continue to be strong over the next 10 years thanks to expected growth in demand for 5G smartphones, AI, and electric vehicles. Intel’s CEO is on the side of those industry executives who see the current demand for chips continuing into the future.

    Other executives don’t believe that the industry can sustain the growth of more than 5% on an annual basis. Broadcom Inc. CEO Hock Tan is one such executive. Even though his firm reported a 15% revenue hike for its latest quarter, Tan says chip production is a mature industry that will revert back to low growth.

    There is no denying though, how important chips are to the global economy. The U.S. leads the way in the sales and design of chips although production is led by Taiwan’s TSMC and South Korea’s Samsung. TSMC will be opening at least one fab in Arizona no later than 2024.

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  • Korea automobile production falls for 3rd year in 2018

    Korea automobile production falls for 3rd year in 2018

    Korea’s auto production tumbled for a third consecutive year in 2018 amid weaker domestic and global demand, data showed Sunday. According to the data by the Korea Automobile Manufacturers Association (KAMA), Korea produced 4.03 million vehicles last year, down 2.1 percent from the previous year. The figure has been decreasing over the past three years from 4.56 million in 2015 to 4.23 million in 2016 and 4.12 in 2017.

    The 2018 figure put Korea as the seventh-largest car manufacturing country in the world, down one notch from the previous year, according to the association.

    Korea became the world’s fifth-largest maker of cars in 2005 and retained the ranking until 2015. But India edged out Korea to stand at the world’s sixth in 2016 and 2017. Last year, Korea fell behind Mexico.

    China was found to produce the largest number of vehicles in 2018, with 27.81 million followed by the United States, Japan, Germany and India.

    Korea’s total car exports also fell to 2.45 million vehicles last year from the previous year’s 2.53 million, the KAMA said, adding that the country accounted for 4.1 percent of the world’s car production in 2018, down 0.1 percentage point from a year earlier.

    “Contentious labor-management relations, as well as stiff labor market conditions, among others, appear to negatively affect local carmakers’ competitiveness,” the association said in a release, calling for state support and business innovation.

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  • Vietnam driven to protect domestic automobile industry

    Vietnam driven to protect domestic automobile industry

    Vietnamese policymakers are looking at ways to safeguard the domestic automobile industry against foreign rivals, based on an official document released by the government office.

    Vietnam’s automobile industry is expected to face more hurdles in the years to come as the local market opens up to foreign competitors.

    Locally-assembled cars could cost 20 percent more than those imported from neighboring countries such as Thailand and Indonesia in 2018, when tariffs on car imports into Vietnam from other ASEAN countries will be cut to zero from the current 50 percent, the trade ministry said.

    The government has asked trade officials to look at ways to prevent a surge in car imports.

    Meanwhile, the finance ministry will review import tariffs on cars and monitor their origin to prevent tax dodging.

    Vietnamese policymakers also plan to adjust import tariffs on automotive parts that are not available in the domestic market.

    The Southeast Asian country has targeted car manufacturing as a “spearhead industry” that could help it move up the global chain.

    However, the fact that it still heavily relies on imported cars to meet local demand has exerted tremendous pressure on local manufacturers.

    Vietnam imported 15,270 units in the first two months this year, a 35 percent jump from a year ago, customs data showed.

    The import surge comes as Vietnamese people switch from motorbikes to cars, with more than half of the imported cars classed as midsize sedans, based on official statistics.