As a result of this drop in demand, many semiconductor manufacturers switched their production to other customer industries. Thus, companies from the consumer electronics sector were able to book their production facilities with the semiconductor industry for the production of new smartphones with 5G functions or for new gaming platforms - and the chip manufacturers were happy to compensate for the slump in demand from the automotive industry with other orders.
But the auto industry recovered faster than feared, plus the strong growth of electrified vehicles continues to drive demand for semiconductors in the automotive industry, as these models require significantly more semiconductors than cars with conventional drive systems. "The current challenges are not structural problems that require an increase in investment to fix," automotiveIT quotes IHS Markit analyst Phil Amsrud as saying. "They are the result of a perfect storm of non-automotive segments consuming wafer fab capacity with new products ahead of the holidays.”
In the semiconductor industry, Intel's historic order to TSMC was an exacerbating factor - it came before the auto industry could foresee its impending recovery. As a result, the auto industry now has to share top priority at semiconductor manufacturers with customers in other industry segments. "It seems s that the first half of 2021 will be a difficult time for the (automotive) industry," the analyst commented.