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Thursday, January 27, 2022

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    Cost of chip shortage totals $210 billion — double early estimates

    Detroit — The global semiconductor shortage will cost $210 billion in lost revenues this year, estimates AlixPartners LLP, up 91% from the firm’s previous May forecast of $110 billion.

    Additionally, the global consulting firm with roots in Metro Detroit now expects the industry to lose production of 7.7 million vehicles this year, a 97% increase from the 3.9 million estimated in May. 

    The updated forecast represents a sharp downgrade from earlier expectations and comes as automakers continue to struggle with the semiconductor shortage still causing production halts in various plants in North America, Europe and Asia. COVID-19 outbreaks and lockdowns in Asian countries where most semiconductors are made have prolonged the issue.

    The latest victims in the chip shortage are Stellantis NV plants producing heavy-duty Ram pickup trucks, the Jeep Grand Cherokee and Dodge vehicles, which will idle next week. 

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