Leading automotive chipmakers, however, were less sanguine.
Infineon said on Thursday that the supply-demand imbalance would improve for some chips in the second half of this year, but that the market for mature chips — crucial to automakers — would remain tight.
“Supply limitations are far from over and will persist well into 2022,” Infineon CEO Reinhard Ploss said during an investor call. Infineon is concerned that the spread of the Omicron COVID-19 variant would lead China, with its zero-COVID strategy, to shut down factories, limiting supply.
NXP also said that the industry would not get out of the supply-demand imbalance this year.
Semiconductor makers have an incentive to focus on the newest, most expensive chips, and Apple CEO Tim Cook said there were significant supply constraints on “legacy nodes,” less sophisticated chips used in power management and display devices, although they are improving in the current quarter.
“There are a couple of the fabs that are going to come online towards the end of the year that will help those markets but not fully solve the problems,” said Peter Hanbury, a partner at Bain & Company.
A chip factory takes a couple of years to build and another couple to get to maximum capacity, STMicroelectronics said. The company said in November that it would take until 2024 or 2025 to see a major increase in capacity.
Ford has partnered with U.S. chipmaker GlobalFoundries to reduce dependence on Taiwan’s TSMC on older technology chips, which Ford CEO Jim Farley described as “feature rich.”
“We are very dependent on TSMC for our feature-rich nodes. Obviously, the capacity is at risk over time as the industry moves to more advanced nodes, including us,” Farley said during a conference call.
He said Ford would put cash up to work with GlobalFoundries on older node chips, though it will take time for the chipmaker to build the chips in the U.S.
“We have very painfully learned the lesson that we cannot manage the supply chain for these key components as we have,” he said, adding that supply chain is critical to the transition to vehicle electrification and digitalization.
