Highlights

• With its multi-tier system, the auto chip supply chain is more fragmented and longer compared with the general semiconductor supply chain, which renders the shortage issue more complex.
• An average vehicle is equipped with up to 1,400 semiconductors. The aggregate value of all these chips is projected to be USD 2,720 per vehicle in 2025. Due to a different electrical/electronic architecture, EVs will have more than that.
• Four elements contribute to the current shortage of auto chips: the cyclical nature of the global chip industry, suspension led by the pandemic, booming demand for other electronics and black-swan events.
• Microcontrollers (MCUs) are seeing the most shortages among semiconductors. Although TSMC is busy with producing other chips, it has declared it will prioritize ECU foundry making.
• We estimate the chip shortage to affect the sale of 2.4 to 4.8 million cars in 2021, or 2.8% to 5.6% of the total global vehicle sales.