Chip shortage a ‘short-term’ problem, says Elon Musk
Tesla, Inc. CEO Elon Musk revealed on Friday, September 25, that he was confident the current global chip crisis was going to be resolved in the short term. When asked how long he thought the global semiconductor shortage would affect the auto industry, Musk replied, “in the short term, I think.”
“There are a lot of chip making factories that are being built,” Musk said in a joint session with Stellantis and Ferrari chairman John Elkann at Italian Technology Week.
“I think we will have a good capacity to deliver chips by next year,” he added.
The two industry leaders have agreed on potential support from nuclear power to meet growing global energy demands.
“I am surprised by the recent withdrawal of some countries from nuclear power, which is safe,” Musk said.
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The Covid-19 pandemic resulted in an increase in demand for basic electronics and cars that the supply chain could not handle, especially the microchip industry.
This chip shortage resulted in a domino effect that crushed the auto industry. Pat Gelsinger, CEO of Intel, a global leader in the semiconductor industry, recently said it would take a few more years for the semiconductor industry to catch up with growing demand.
The US-based chipmaker plans to expand its use of external foundries to produce a line of products. The executive also said that Intel will significantly expand its manufacturing operations and create semiconductor chips for other companies.
Earlier this year, Musk said the global chip crisis was affecting Tesla, although he believes it’s not a long-term problem.
Discussing the electric vehicle maker’s performance this quarter, Musk said Tesla’s biggest challenge was to solve the supply chain conundrum.
Our biggest challenge is the supply chain, especially the microcontroller chips. Never seen anything like it. Fear of running out is causing oversupply for all businesses, like toilet paper shortage, but on an epic scale. Having said that, this is obviously not a long term problem.
The CEO’s outlook is much more optimistic than that of other leaders in the auto industry who believe it could last until 2023-24.