AUTOMAKERS, including General Motors, Ford Motor and Hyundai Motor, predict a near two-year chip constraint will ease in the second half of 2022, but automotive chipmakers, on the other hand, expect a recovery to take longer.

During their quarterly results reporting over the past two weeks, GM CEO Mary Barra projected the semiconductor shortage would diminish in the second half of this year, Ford forecast a significant improvement in the second half after a first-quarter low in vehicle sales, and Hyundai predicted chip supply would return to normal levels in the third quarter of this year.

But leading automotive chipmakers like NXP and Infineon forecast a supply squeeze to persist despite production increases.

The differing outlooks on the most pressing issue facing the automobile industry prolong uncertainty about its recovery from the coronavirus pandemic and risk hampering its efforts to transition to new, chip-intensive technologies such as electrification and safety and driving-assistant features.

The chip shortage was expected to have cost the global auto industry in 2021 US$210 billion in revenues and lost production of 7.7 million vehicles, consultant AlixPartners estimated in September.

But the tide is definitely turning, according to the automakers.

Tesla, which managed chip supplies last year through strategies including writing new software to handle changes in chips, expects chip shortages to last through this year before easing next year.

Chief executive Elon Musk told an earnings call last month the shortage was not a long-term issue, with factories increasing capacity and automakers guilty of panic buying of chips which slowed the supply chain.

Chip firm Qualcomm was optimistic.

“I do think that a lot of our peers along with us are prioritizing the auto business and shipping as much as you can,” said Akash Palkhiwala, Qualcomm chief financial officer.

Leading automotive chipmakers, however, were less sanguine.

Infineon said the supply-demand balance would improve in some chips for the second half of this year, but 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.

NXP also said 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 Inc.’s 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.(SD-Agencies)