Despite the fact that a chip glut is hurting memory suppliers like Samsung Electronics, India's carmakers are still waiting for the shortage of automotive chips to ease.
PTI and Mint reported that Maruti Suzuki, India's largest carmaker with a market share of more than 40% in passenger vehicles, expects the chip shortage will persist for the next few quarters, leading to an increase in an order backlog of certain models.
Shashank Srivastava, senior executive officer at Maruti Suzuki India, told PTI that the company lost 46,000 unit sales in the fourth quarter of 2022 due to the chip shortage, which is expected to continue in the following quarters with no visibility to predict when it will ease, adding that Maruti Suzuki had seen a pending order of 369,000 units for the current quarter.
Maruti Suzuki is not alone in handling the automotive chip shortage. Business Standard quoted Santosh Iyer, managing director and CEO of Mercedes-Benz India, saying that the unavailability of parts and semiconductor shortage, which leads to a prolonged waiting period, may affect business in the short run.
Jejurikar, executive director at Mahindra & Mahindra, told Business Standard that the company faces a shortage of airbag sensors, leading to an under-production of the Scorpio and XUV700.
According to TechRepublic, John Waite, vice president for global supply chain at Genpact, said that for non-memory chips, order backlogs will clear, surplus inventory will emerge, and lead times will shorten. In contrast, demands for automotive and autonomous driving chips remain very strong.
As EVs drive growth in vehicle chip content, automotive chip over-demand may prolong its shortage further than other semiconductor segments. Automotive chip suppliers, such as NXP, Infineon, Renesas, Analog Devices, and TI, reported surging sales in their automotive business.
According to IDC, the revenue of global automotive chips is expected to outgrow other segments, accounting for 15% of the global semiconductor market by 2026 from 8% in 2021.
Annual revenue growth forecast by semiconductor segment(%) | ||||||
Year | Automotive | Computing | Consumer | Industrial | Wired Infrastructure | Wireless Communication |
2022 | 24.54 | -0.63 | 1.8 | 16.23 | 9.03 | 0.88 |
2023 | 2.13 | -12.14 | -5.94 | 1.54 | 4.6 | -5.69 |
2024 | 14.07 | 8.21 | 15.95 | 15.62 | 6.55 | 9.97 |
2025 | 11.41 | 5.6 | 10.69 | 18.43 | 7.7 | 7.67 |
2026 | 7.53 | 6.33 | 0.39 | 1.8 | 5.19 | -1.57 |
Source: IDC, March 2023
