Elon Musk says the chip shortage is a ‘short-term’ problem

3 weeks ago
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Tesla Motors CEO Elon Musk speaks to the media adjacent to its Model S.

Nora Tam | South China Morning Post | Getty Images

Tesla CEO Elon Musk said Friday that the ongoing semiconductor crisis volition beryllium implicit by adjacent year.

The tech billionaire said helium thinks spot shortage is simply a "short-term" occupation arsenic opposed to a semipermanent one. 

"There's a batch of spot fabrication plants that are being built and I deliberation we volition person bully capableness by adjacent year," Musk said astatine an Italian tech lawsuit that was streamed online Friday.

Musk did not specify which spot plants helium was referring to.

Chip heavyweights Intel and TSMC person announced plans to physique caller plants successful the U.S. but they won't travel online for respective years yet.

Glenn O'Donnell, a vice president probe manager astatine advisory steadfast Forrester, believes the shortage could past until 2023.

"Because request volition stay precocious and proviso volition stay constrained, we expect this shortage to past done 2022 and into 2023," helium wrote successful a blogpost in April.

The planetary spot shortage has had a large interaction connected a wide scope of industries, but the automotive assemblage has been peculiarly severely hit. Big names successful the manufacture specified arsenic Ford, Volkswagen and Daimler person each been forced to suspend accumulation astatine assorted points and chopped their manufacturing targets arsenic a effect of a deficiency of chips.

Impact connected Tesla

During the company's first-quarter earnings, Musk said that Tesla had immoderate proviso concatenation issues, earlier going connected to notation the spot shortage. 

"This quarter, and I deliberation we'll proceed to spot that a small spot successful Q2 and Q3, had immoderate of the astir hard proviso concatenation challenges that we've ever experienced successful the beingness of Tesla and aforesaid difficulties with proviso chain, with parts — implicit the full scope of parts. Obviously, radical person heard astir the spot shortage. This is simply a immense problem."

Consulting steadfast AlixPartners predicted this week that the spot shortage volition outgo the automotive manufacture $210 cardinal successful gross this twelvemonth alone. 

"Of course, everyone had hoped that the spot situation would person abated much by now, but unfortunate events specified arsenic the COVID-19 lockdowns successful Malaysia and continued problems elsewhere person exacerbated things," said Mark Wakefield, planetary co-leader of the automotive and concern signifier astatine AlixPartners, successful a statement.

Carmakers usage semiconductors successful everything from powerfulness steering and brake sensors, to amusement systems and parking cameras. The smarter cars get, the much chips they use.

In 2019, Tesla started producing cars with customized AI chips that assistance on-board bundle marque decisions successful effect to what's happening connected the road.

Musk said successful July that accumulation of Tesla's Powerwall product, a backup artillery for the home, was "lagging" arsenic a effect of the spot shortage.