The shortage of semiconductors does not hit any sector as hard as the automotive sector.Globally, 18 billion fewer vehicles have been produced due to the chip shortage.European automakers in particular are struggling with production problems.The costs of the semiconductor crisis for the European car industry are estimated to be around 100 billion euros in 2021 and 2021, credit insurer Allianz Trade reports.The car industry has to take some responsibility for the cause of the problems.Allianz Trade states that the sector has partly brought the problems on itself.Johan Geeroms, Director Risk Underwriting Benelux of Allianz Trade: “In order to absorb the corona blow, car manufacturers made significant cutbacks.Among other things, by minimizing stocks and orders for semiconductors.As a result, chip manufacturers sought refuge elsewhere and geared production to strong markets such as computers and data centers.When the car market recovered, there was only a limited amount of chips available for the car industry.”Vehicle production in Europe has fallen to an unprecedented low of 13 million vehicles.Signs of recovery were visible in late 2021 and early 2022. However, production has since slowed down again.This time not due to the chip shortage, but due to supply problems due to ongoing lockdowns in China and the Russian attack on Ukraine.”Geeroms: “According to our calculations, the chip shortage in 2021 and 2022 in Europe cost almost 100 billion euros in added value.On the positive side, historically low inventory levels at retailers seem to indicate great upside potential for the automotive sector.”Geeroms does add that the supply of chips in Europe will remain an uncertain factor for a long time to come.The European Commission introduced the European Chips Act earlier this year.With this, the committee is making tens of billions of euros available to stimulate chip production on European soil.“Europe should not think that it will be able to produce enough chips on its own within five or ten years to fully meet its own demand.It is better to focus European support on achievable objectives.Then you have to look at products for which Europe itself is both a large production and end market.The car industry is a prime example of this.Our own chip production should focus on that,” says Geeroms.He therefore considers it advisable to enter into joint ventures with major global chip makers.Chip use continues to grow, Allianz Trade expects.The credit insurer points to three developments in this regard.Chips, for example, provide connections to the manufacturer's network and drivers' telephones.However, also think of safety, such as motion sensors and blind spot detection.The electrification of vehicles also requires the use of more chips.For example, electric cars contain twice as many semiconductors as cars with a combustion engine.“If we add up the value of all the chips in a car, we arrive at an average of more than 600 euros, worldwide.That value has more than doubled in the past 10 years.That trend will only continue," Geeroms concludes.Author: Wouter Hoeffnagel Photo: axonite from PixabayHome About Manufacturing Industry News Become a blogger Advertising Accessibility and Contact