The semiconductor crisis as a result of the Covid-19 pandemic and impacts on the automotive industry and its supply chains

Abstract

In the first half of 2020, the Corona pandemic led to a drastic slump in the automotive industry, which was replaced by a surprisingly rapid growth in demand in the fall of 2020. The prospect of an equally rapid economic recovery is threatened by supply bottlenecks for raw materials and key components. The semiconductor crisis has been forcing companies in the automotive industry to halt production since the end of 2020, with almost all manufacturers and major suppliers having to reduce their production capacities. This downturn is also strongly affecting suppliers that are not directly dependent on the semiconductor industry, because the automakers are reducing their orders. Currently, short-term supply chain disruptions are overlapping with long-term structural features of the semiconductor industry. The combination of both is preventing that the supply situation in the automotive industry will improve quickly. Nevertheless, specific strategic measures and options can help improve the supply chain resilience in short and long term.