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Musk: “Semiconductor shortage will end by next year”

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Tesla CEO Elon Musk predicted on the 24th (local time) that the semiconductor shortage crisis would end next year.

According to CNBC, CEO Musk said, “I think (the semiconductor shortage) will be short-lived” during an online video chat with John Elkann Stellantis, president of Stellantis, at the “Tech Week” event held in Italy the same day.

musk speaking on semiconductor shortage crisis, at Tech Week in Italy

“Many (semiconductor) manufacturing plants are under construction,” he said, adding, “I think we will have excellent semiconductor supply capabilities by next year.”

Tesla is not the only carmaker that is experiencing difficulties this year as major carmakers such as Volkswagen, Daimler and Ford have closed factories or cut back production due to a shortage of automotive semiconductors.

According to Alyx Partners, a consulting firm, the global automotive industry will lose $210 billion in sales this year alone due to a shortage of semiconductors.

AlixPartners co-head of automotive and industrial, Mark Wakefield, said: “Everyone had hoped that the semiconductor crisis would have eased by now, but the situation is worsening due to unfortunate events such as the COVID-19 lockout.

Industry experts, however, believe that it will be difficult to normalize the supply of semiconductors in the near future.

Major semiconductor companies, such as Intel and TSMC, have announced plans to build new factories in the US, but it may take several years for them to become fully operational.

As Glenn O’Donnell, vice president of consulting firm Forrester, stated, “We expect this shortage to continue into 2022 and 2023, as demand will remain high and supply will be limited.”

Semiconductors are very important parts for the production of vehicles, such as those used in infotainment systems, steering systems, and brakes.

Tesla began producing cars with artificial intelligence (AI) chips back in 2019. AI chips allow cars to decide how to react to road conditions.

For MetaNews.

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Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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