May 17, 2021—The ongoing semiconductor chip shortage is now expected to cost the global automotive industry $110 billion in revenue in 2021, CNBC reported.
According to a new forecast by the consulting firm AlixPartners, the number has jumped from an estimated $60.6 billion that was predicted back in January.
“The pandemic-induced chip crisis has been exacerbated by events that are normally just bumps in the road for the auto industry, such as a fire in a key chip-making fabrication plant, severe weather in Texas and a drought in Taiwan,” Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners, said in a press release. “But all these things are now major issues for the industry—which, in turn, has driven home the need to build supply-chain resiliency for the long term.”
AlixPartners is forecasting that production of 3.9 million vehicles will be lost this year as a result of the shortage, an increase from January’s forecast that estimated the shortage would cut production of 2.2 million vehicles.
