NEW YORK (Dispatches) - The semiconductor chip shortage that’s roiled the global car market is now expected to cost the industry $210 billion in revenue this year, consulting firm AlixPartners said Thursday.
The revised forecast is nearly double the New York-based firm’s projections from May, when it expected to see $110 billion in lost revenue due to the shortage.
Semiconductor chips are a critical component in new cars that power features ranging from entertainment systems to power steering and brakes.
Supply has been constrained during the COVID-19 pandemic due to shutdowns at factories amid outbreaks as well as surging consumer demand for electronics that use the chips.
Semiconductor chips power features ranging from entertainment systems to power steering and brakes.Alamy Stock Photo
On top of the chip shortage, the industry’s grappling with economy-wide issues like a lack of workers and a steel shortage, Wakefield added.
The group said it’s now forecasting that 7.7 million units of production will be lost in 2021, up from 3.9 million in its forecast published in May.