Credit Suisse’s Randy Abrams predicts it will take months for chipmakers to catch up with supply shortages for the auto sector.

«We can say that this is a global tension or a shortage of microcircuits», – said on Tuesday on CNBC «Street Signs Asia» Randy Abrams (Randy Abrams), Credit Suisse Analyst.

Abrams’ comments come as automakers around the world are shutting down assembly lines over semiconductor supply issues, according to Reuters..

«The current shortage stems from chipmakers slashing production in the middle of last year as customers cut orders, Abrams explained. He added that a shortage of microcircuits for the automotive sector has created a problematic situation where cars cannot be built due to the lack of certain components..

«I really think that by the middle of the year we should start catching up», – he said, but warned that it would be very «heavy couple of blocks».

Taiwan Semiconductor Manufacturing Company, the world’s leading foundry, is among the companies struggling to meet the growing demand for semiconductor products..

Reuters reported earlier this week that TSMC will prioritize car chip production if the company can continue to expand its production capacity. The report cites information from ministries Taiwan’s economy.

The Covid-19 pandemic has dealt a devastating blow to nearly every industry in the world as businesses and economies have been forced to shut down by lockdowns due to the coronavirus pandemic, causing severe global supply chain problems and widespread job losses..

The automotive industry has not spared this either: the Boston Consulting Group’s December report predicts that sales in Europe and the United States will return to pre-crisis levels no earlier than 2023..

According to Abrams, the deficit underscores «strategic importance» chips.

«For the first time in a long time, semiconductors are limiting car production», – he added.

Global microchip shortage may narrow by mid-year

Apart from the automotive industry, he said, these problems are also seen in other sectors such as cloud computing and artificial intelligence development..

Credit Suisse analyst says there are fewer manufacturers now capable of producing better chips compared to the previous boom in the sector, citing Samsung Electronics and Intel as the other two. «advanced manufacturers» with such opportunities.

«This is the reality the industry has to deal with – it’s getting harder and harder to manufacture modern chips.», – said Abrams.

Competition among the top chip makers is also heating up.

Intel, which has ceded market share to competitors such as AMD, Samsung and TSMC, recently announced the appointment of an industry veteran Pat Gelsinger (Pat Gelsinger) for the position of CEO.

Meanwhile, Bloomberg reported last week that Samsung Electronics is considering building its most advanced logic chip factory in the United States. This comes after TSMC announced in May that it would build a semiconductor plant in Arizona, and the total project cost would be $ 12 billion..

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