Elon Musk Believes Chip Shortage Is Only A ‘Short Term’ Problem

One of the main knock-on effects of the COVID-19 pandemic, the global semiconductor crisis has led to widespread delays in the automotive industry. It has resulted in many leading manufacturers, such as GM and Ford, halting production at several of their plants for weeks on end. However, Tesla CEO Elon Musk does not expect the chip shortage to last, predicting it will likely be over by next year.

Speaking at Italian Tech Week in Turin, Musk stated that the chip shortage is a “short term” problem and that several chip fabrication plants are being built. He does not expect the chip shortage to continue into 2022 and beyond.

“There’s a lot of chip fabrication plants that are being built and I think we will have good capacity by next year.”

Musk also spoke of how Tesla was able to respond to the crisis. Through using alternative chips and rewriting software, they were able to maintain production.

“We were able to substitute alternative chips and then write the firmware in a matter of weeks. It’s not just a matter of swapping out a chip. You also have to rewrite the software. So it was an incredibly intense effort of planning new chips, writing new firmware, integrating it to the vehicle and testing it in order to maintain production.”

Not all share the same view as Musk however. Glenn O’Donnell, vice president and research director at advisory firm Forrester, believes the chip shortage could last well into 2022 and maybe even 2023 as “demand will remain high and supply will remain constrained”.

It will certainly be interesting to see if the shortage will continue as the rest of society eases back to normality. The semiconductor crisis has led to several manufacturers cutting production targets, and has undoubtedly had a huge financial impact on many.


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