Since late 2020, disruptions in the automotive semiconductor supply chain have been identified. Pressure has been building as the automotive industry has gradually recovered from the containment and shutdown of production in the first half of 2020. This recovery was met with increasing demand from the consumer electronics sector as a whole, which was itself recovering strongly and which at the end of the year was stocking up for the holiday season.

First, an earthquake in Japan brought the factory of the leading Japanese manufacturer, Renesas Electronics, to a halt, resulting in three days without production.

Then, a cold snap hit the United States and more precisely the region of Austin, Texas. This is where several semiconductor manufacturing plants are located, including those of NXP, one of the market leaders, and Samsung, another heavyweight. There too, a shutdown and above all, it will take at least a month to restart the machine.

The latest disaster: on Friday 19 March, the Renesas Electronics factory in north-east Japan was once again shut down, this time because of a fire. A machine caught fire due to an electrical fault. As a result, it will take at least a month to restart production.

As a result of these pressures, light vehicle manufacturers have seen an increase in supply disruption for systems using semiconductors in the first quarter of 2021.

According to the latest information on the state of the supply chain, the disruption will peak in the second quarter of 2021.

Japanese carmakers Toyota, Honda and Nissan are considering scaling back their production plans for 2021. French factories are slowing down. Renault and PSA factories have been forced to temporarily halt production due to insufficient deliveries.

In the US, the shortage could cost Ford up to $2.5 billion. Overall, it is expected to cut global production by 670,000 vehicles in the first quarter, according to IHS Markit.

In the electronics sector, the geopolitical situation is made uncertain by the tug of war between China and the United States. This diplomatic and economic escalation is likely to alter the nature of international relations and change the course of globalisation. China’s objective of technological self-sufficiency in 70% of key components and materials by 2025 has been confirmed, which will necessarily call into question the current balance, although it is not possible to quantify the impact on the world market today.

The situation will gradually be resolved during 2021. But these difficulties have had the effect of a reminder: without Europe’s rise to power, the semiconductor market could structurally become increasingly tense.

To avoid repeated shortages and reduce dependence on Asia, Europe is now seeking to strengthen its industry. In December, 16 EU countries (including France) announced that they were preparing an “industrial alliance” to strengthen European capacities “in the design and manufacture of chips”. According to Internal Market Commissioner Thierry Breton, between €20 billion and €30 billion of investment would be needed to launch Europe on the path to the latest generation of semiconductors.