Billionaire Elon Musk: Lack of chips is a short-term problem

Billionaire Elon Musk, CEO of American electric car company Tesla believes that the current semiconductor crisis will end next year.

Billionaire Elon Musk, CEO of electric car company Tesla. Photo: AFP

According to Elon Musk, the global chip shortage is a “short-term” problem, not a long-term one. “There are a lot of chip factories under construction and I think we will have good capacity next year,” the Tesla CEO said at an online technology event held in Italy.

Previously, the world’s “big boys” in the chip industry such as Intel and TSMC have announced plans to build new factories in the US, but these factories have not been put into operation in the past few years.

Meanwhile, Mr. Glenn O’Donnell, deputy director of technology market research firm Forrester, said that the chip shortage could last until 2023.

“As chip demand will remain strong and supply remains constrained, we expect this shortfall to persist through 2022 and into 2023,” said Glenn O’Donnell.

The global chip shortage has severely impacted many industries, with the automotive sector being the hardest hit. Big names like Ford, Volkswagen, and Daimler have all been forced to suspend production in many places and lower output targets due to chip shortages.

In Tesla’s Q1 2021 earnings report, Musk mentioned some of the supply chain problems autos are facing, before mentioning chip shortages. “In the first quarter, and I think both In Q2 and Q3 we will continue to face some of the biggest supply chain challenges we’ve seen in Tesla’s history.”

“Obviously, people have heard about the chip shortage. It’s a huge problem,” Musk said.

This week, financial consulting and restructuring firm AlixPartners predicted that chip shortages will cost the auto industry $210 billion in revenue in 2021.

“Of course, everyone is hoping that the chip craze will cool down more at the moment, but worrying issues like the anti-Covid-19 blockade in Malaysia and many other issues have brought things down. more important”, ohng Mark Wakefield, Head of Automotive Research at AlixPartners commented.

Automakers use semiconductors to manufacture many components, from power steering systems and brake sensors, to entertainment systems, and parking cameras. The smarter the cars and the more features, the more chips they “consume”.

In 2019, Mr Musk began to use AI chips (artificial intelligence) to help Tesla electric cars make decisions to handle situations on the road.

In July, billionaire Musk said that a lack of chips had slowed production of Tesla’s Powerwall backup batteries.