The semiconductor shortage that slowed global auto production in 2021, and led to the lowest level in vehicle production in Canada since 1967, is improving, according to General Motors CEO Mary Barra.
“With an improving outlook for semiconductors in the U.S. and China, we expect our 2022 results will remain strong,” Barra said during her comments about the automotive giant’s earnings report. She added the shortage will begin to ease in coming months.
While that sounds like great news for Canada’s automotive industry and the shops that service it, is it possible it’s overly optimistic?
That seems to be the suggestion from Yahoo Finance’s technology editor Daniel Howley, who writes in his column that though the chip shortage may be easing, “It’s far from ancient history.”
He points out that major semiconductor producers ranging from Intel and Nvidia to NXP Semiconductors, one of the largest suppliers of automotive chips in the world, say shortages will continue into 2023.
True, there are plans to build new chip plants in North America and abroad and that will boost chip supplies, Howley concedes. Those new plants, however, won’t begin production for at least another year.
Canada produced just over 1.1 million vehicles in 2021, compared to 1.4 million in 2020 and close to two million in 2019.
Automakers responded to the shortages by concentrating on their more profitable models, such as pick-up trucks and SUVs, which pushed Canada’s share of production to below nine percent.
The Canadian share of the continent’s automotive production had been as high as high as 17 per cent back in 2009.