The push to free up more capacity sounds promising. But the reality is that such plans won't help much for a while.
Global automotive chipmaker Renesas Electronics Corp. said last week that its Japanese plants are working on "overdrive" to meet orders, but there is little more it can do.
"They are running at the limit of their capacity," CEO Hidetoshi Shibata told Bloomberg. "Supply will remain tight through the first half of the year," Shibata said of the industry shortage. "And the way things look now, the situation will continue into the second half. But it's anyone's guess."
In one nod to relief yet to come, German megasupplier Bosch said last week it has reached a critical testing phase at its own new $1.2 billion chip plant in Dresden, Germany. But that factory project has been under construction for two years and isn't expected to start production until the end of this year — a testament to how long it takes to put new manufacturing capacity on line.
More notable is that Bosch undertook that plant project to meet its own growing needs as it converts headlong into being a supplier of advanced vehicle components.
Coincidentally, chip producer GlobalFoundries of Santa Clara, Calif., last week announced a partnership with Bosch to develop radar chips for driver-assistance features.
But Mike Hogan, GlobalFoundries general manager of automotive, industrial and multi-market, said the move was part of a long-term sourcing strategy — not a response to the current commodity shortage. The near term, Hogan warned, is going to be painful.
"It will get better," he said of the supply problem, "but it could have a lumpy path out of this bottom. It could last longer for some. It's just very hard to predict."
The problem, Hogan added, is that only about 12 percent of the semiconductors used in the U.S. are made here. "The entire auto industry realizes that, not only does it need more semiconductors, semiconductors are actually defining the product," he said.
President Joe Biden last month issued an executive order calling for a review of the domestic supply chain, and many industry leaders have called on the White House to initiate trade agreements that would better secure chip supply in the future.
But federal action may only help in the long run, said Chris Richard, principal of the semiconductor industry at consultancy Deloitte.