Semiconductor Chip Shortage Could Last Until 2023: Mercedes Parent Company.

ByFaisal Chughtai | Published date:
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Many functions in today's cars rely on semiconductor chips, and their scarcity as a result of a pandemic-induced supply chain disruption has concerned manufacturers, who believe the shortfall will continue until 2023, although with less intensity.

Ola Källenius, Chairman of Daimler AG's Management Board and Head of Mercedes-Benz, stated at the Munich Internationale Automobil-Ausstellung (IAA) car show that "several chip suppliers have been referring to structural problems with demand, which could influence 2022 and [the situation] may be more relaxed in 2023."

Due to the chip scarcity, Mercedes-Benz expects its sales to fall substantially in the third quarter, according to Källenius. Previously, manufacturers like General Motors in the United States, Toyota in Japan, and Mahindra and Mahindra in India has reduced their sales due to shortage.

Meanwhile, the revival of COVID-19 in South East Asia's semiconductor manufacturing centres has compounded matters.

Automotive manufacturers were forced to shut down operations owing to COVID-19 lockdowns. Since the lockdowns were released, the automobile industry has been in a heated rivalry with the electronics sector to get the chips.

Daimler AG's supply of semiconductor chips, according to Källenius, is expected to increase in the fourth quarter of this year.

He also said that Mercedes would exhibit numerous Electric Vehicles (EVs) such as the Mercedes EQE at the Munich Motor Show as part of Daimler's goal to electrify its model lineup.

At the IAA, Mercedes will also reveal its concept vehicle, the Mercedes Maybach, as well as its fully electric SUV, the EQB, for European markets.

Daimler AG stated in July that it would invest more than $47.5 billion by 2030 to compete with Tesla in the EV industry.

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