Volvo Cars sees chip shortage extending into 2022, Q3 profit dips By Reuters

© Reuters. FILE PHOTO: People look at a Volvo XC40 car during the Beijing International Automotive Exhibition, or Auto China show, in Beijing, China September 26, 2020. REUTERS/Thomas Peter/File Photo

By Helena Soderpalm

STOCKHOLM (Reuters) – Volvo Cars warned on Tuesday that the sector-wide semiconductor shortage would continue into next year, as its first quarterly report since listing on the stock market a month ago confirmed a dip in revenue and profit.

The Gothenburg-based carmaker said supply chains were still constrained but while production remained lower than demand, it had “improved month by month” since September.

“The supply situation has improved going into the fourth quarter, but we expect the industry-wide shortage of semi-conductors to remain a restraining factor,” Chief Executive Hakan Samuelsson said in a statement.

Volvo’s initial public offering (IPO) on Oct. 29 was the biggest in Europe so far this year, a sign of strength for the

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Melrose order cancellations surge as automakers battle chip shortage By Reuters

© Reuters. FILE PHOTO: A researcher plants a semiconductor on an interface board during a research work to design and develop a semiconductor product at Tsinghua Unigroup research centre in Beijing, China, February 29, 2016. REUTERS/Kim Kyung-Hoon/File Photo

(Reuters) -British parts supplier Melrose’s automotive clients are cancelling orders at 25 times the rate seen earlier this year, it said on Tuesday, as the auto industry remains engulfed in a global chip shortage caused by the pandemic.

The owner of GKN (LON:), which supplies parts to carmakers such as Volkswagen (DE:), said the “in-month” cancellation from automotive customers has risen to about 20% to 25% from a normal 1% rate seen during the January-March period.

“Tightened supply of semiconductors to the automotive industry are frustrating and difficult to plan for, but whilst they affect current trading, they don’t impact long-term value, particularly as cash is well controlled and debt reduced,” Chief

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Chip shortage expected to cost auto industry $210 billion in 2021

Ford started resuming vehicle production in the U.S. on May 18, 2020 with new coronavirus safety protocols such as health assessments, personal protective equipment and facility modifications to increase social distancing.


With no end in sight this year, the ongoing semiconductor chip shortage is now expected to cost the global automotive industry an estimated $210 billion in revenue in 2021, according to consulting firm AlixPartners.

The forecast is almost double it previous projection of $110 billion in May. The New York-based firm first released an initial forecast of $60.6 billion in late January when the parts problem started causing automakers to cut production at plants.

“Of course, everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners,

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Semiconductor shortage looms large, situation in domestic market worrying

a circuit board: Semiconductor shortage looms large, situation in domestic market worrying

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Semiconductor shortage looms large, situation in domestic market worrying

The automotive industry for years has had no dearth of issues to deal with but nothing has come quite close to Covid-19 and the slowdown in demand. Just as things have started to look up, the shortage of semiconductors has only got more acute. Faced with a situation where manufacturers are pursuing demand for the chips from other industries, the question comes down to how much is the automotive industry willing to adapt in a highly disruptive market dynamic.

A McKinsey report put out this May (Coping with the auto-semiconductor shortage: strategies for success) clearly outlines the changing equation globally. Demand for semiconductor sales from wireless communication was up 6% in 2020 and 11% in the case of personal computers. That surge is understandable given the pandemic and the large proportion of the world’s working population

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