Impact Of Global Chip Crisis, Automotive Companies Predicted To Lose IDR 2,982 Trillion

Global chip crisis impacts the auto industry (Techstory)

JAKARTA - The crisis of semiconductor chips that hit the world today has an impact on automotive manufacturers. A report from consulting firm AlixPartners says that this year's chip crisis will result in lost revenue in the auto industry of around 210 billion US dollars (equivalent to IDR 2,982 trillion).

This loss prediction has increased from the previous projection in May which was in the range of 110 billion US dollars. Meanwhile, in early 2021, AlixPartner predicts the automotive industry will lose around 60.6 billion US dollars due to the global chip crisis.

"Of course everyone is hoping the chip crisis will ease more now, but unfortunate events like the lockdown in Malaysia and continuing problems elsewhere have made things worse", said AlixPartners global auto co-leader, Mark Wakefield, as quoted by CNBC International.

In addition, AlixPartners revealed that around 7.7 million production cars were canceled in 2021. This estimate is up from the prediction in May which only penetrated 3.9 million units.

Automakers around the world including General Motors (GM) and Ford Motor have warned of massive revenue cuts due to limited global chip supplies. However, consumer demand is starting to recover.

The semiconductor chip crisis that occurred this year was the impact of the Covid-19 pandemic. This situation has led to a skyrocketing need for electronic devices to support work from home (WFH) policies. Therefore, car manufacturers are forced to compete with electronics companies for chips as demand continues to increase.

In addition, another factor that is suspected to be the cause of the shortage of semiconductor chip supply in the United States policy which tightens export permits for all global companies that use US technology.