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Automakers & Chipmakers March Towards a New Clash of Interests

The end of the recent auto semiconductor supply shortages will test the durability of partnerships and alliances built over the last years by OEMs and their chip suppliers.
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By Bolaji Ojo

What’s at stake:

As the automotive semiconductor shortages ease, an old bogeyman is threatening to return to haunt the supply chain. Inventories are rising even as automakers grapple with the shift to Electric Vehicles from Internal Combustion Engines vehicles. As the memories of the painful auto IC shortages fade, will OEMs dump the playbook that enticed chipmakers to increase production and, if they do, will that action trigger another crisis if chipmakers refuse to again shoulder all the risks?

The automotive semiconductor supply chain is sliding into a new testy phase.

OEM orders for semiconductors are still rising albeit at a slower pace. Inventories are increasing but some products remain on allocation although nobody quite knows which.

Meanwhile, inventories are creeping up at chipmakers even as they continue to ramp up production. The specter of double ordering is haunting suppliers but analysts say it is almost impossible to distinguish between actual orders and duplicates.

Inconsistencies like these hark back to a past the semiconductor industry was supposed to have jettisoned.

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