Chip shortage easing, but there are pain points: IESA

The easing semiconductor supply situation is resulting in a gradual recovery in production for Indian carmakers. Maruti Suzuki and Mahindra & Mahindra are gearing up to increase production.

At a recent annual general meeting of Tata Motors, Group Chairman N Chandrasekaran said the semiconductor situation is improving.

Deloitte expects semiconductor sales to touch $600 billion this year. Companies lost $500 billion worldwide in sales in 2021 due to the semiconductor shortage. The automobile industry alone lost over $200 billion.

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Speaking to CNBC-TV18, K Krishna Moorthy, CEO and President of the Indian Electronics and Semiconductor Association (IESA), said, “The situation is definitely improving. All the data that we have today is pointing towards that. The number one reason for this is that the manufacturing plants have increased their capacity to the extent of about anywhere from 10 to 15 percent. So that itself has started easing the supply, much better than what it was same time last year.”

He added, “But when I say it has improved, it is not that across the board everything has improved. So there are still pain points. So the higher the specifications, techniques, quality, reliability requirements, the longer it takes, but it is still half of what it was this time last year.”

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