Index estimates that the semiconductor shortage will continue through June 2022

The National Council of the Maquiladora and Export Manufacturing Industry (Index) estimates that the semiconductor shortage will continue in Mexico until May or June 2022.

“This is an issue that will continue and will improve perhaps until May or June of the coming year,” said Luis Manuel Hernández, president of the Index, at a press conference in Chihuahua on Thursday.

The global semiconductor shortage It has led to a reduction in the production of motor vehicles in Mexico, which in turn has slowed down Mexican exports of products.

At the same conference, Román Rivas, president of the Association of Maquiladora Exporters of Chihuahua (affiliated with the Index), said that some 5 million new motor vehicles will stop being produced in 2021, compared to 2020, due to the shortage of semiconductors, based on IHS Markit projections.

Rivas explained that the global electronics sector has been strongly impacted by insufficient chips and gave as an example that it is currently very difficult to buy a game console Play Station new, or if it is achieved, it is paid dearly.

So this has influenced the rise in inflation in the world, having the automotive industry as one of the hardest hit.

For his part, Hernández also indicated that because the largest semiconductor production in the world occurs in Asia, normalization will occur first in that continent and then in the rest of the world. Thus, the inflection point in the improvement that he traced for May or June 2022 in the case of Mexico, “does not mean that the problem is solved on that date.”

In Mexico, the companies of the maquiladora industry and export manufacturing generates more than 60% of the country’s exports and 84% of foreign trade with the United States.

During the beginning of the health emergency due to Covid-19 and in view of the expectation of a significant negative impact on the production and sale of vehicles worldwide, the producers of the automotive sector reduced their sales projections.

As a result, their orders for inputs, including semiconductors, also decreased.

At the same time, the containment measures led to a significant expansion in global demand for computing, mobile telephony and electronic products, which, like vehicles, are intensive in the use of semiconductors.

After the reopening, world demand for vehicles recovered rapidly, so that a few months after the start of the pandemic, the global automotive industry reached a level of production similar to that observed before the health emergency, according to data from the Bank of Mexico.

However, the world’s installed semiconductor production capacity has not been able to simultaneously meet the high demand in the sectors.

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