Ford Seeing the Light at the End of the Chip Tunnel, No Miracle Happening Overnight

ford-seeing-the-light-at-the-end-of-the-chip-tunnel,-no-miracle-happening-overnight

Ford is one of the companies that have been struggling to deal with the lack of chips, and just like many other competitors, it turned to temporary shutdowns of its assembly lines simply because it didn’t have enough semiconductors to install on its cars.

The production of the Ford F-150, one of the company’s most successful models in the United States, has also been affected, with the American carmaker obviously closely monitoring the supply chain in an attempt to anticipate any disruption that the chip crisis could have on its operations.

And now it looks like the shortage is slowly but surely easing off, with CEO Jim Farley recently quoted as saying that the supply has improved, with the inventory levels slightly recovering in the last quarter.

However, this doesn’t necessarily mean the chip struggle is over. Not at all. Farley himself warns the shortage will also continue into 2022, and carmakers will be forced to deal with the same problems as the ones they are fighting to cope with right now.

But on the other hand, there are more and more signals coming from the auto industry that the chip shortage should be fully resolved in approximately 12 months.

Market research firm IDC recently released a forecast predicting that the production of semiconductors would align with the demand next year, with the first signs of recovery to be recorded in the fourth quarter of the year.

And while the inventory problems will be fully resolved at some point next year, the massive investments in semiconductor manufacturing could easily lead to an oversupply that could be reached in 2023.

In other words, foundries could end up building more chips than customers can purchase, at which point analysts expect the prices to be substantially reduced, especially in the most competitive industry sectors, including computer hardware and car manufacturing.