Volkswagen expects chip supply situation to remain tense

Volkswagen expects semiconductor supplies to the auto sector to remain tight in coming months, the head of the automaker’s namesake brand said on Saturday.

“I think the situation will remain tense,” Ralf Brandstaetter, CEO of the Volkswagen brand and member of the automaker’s management board said.

He said a fire at a factory operated by automotive chipmaker Renesas, and also snowstorms in Texas have caused factory production crisis.

“The impact will certainly be felt in the coming months,” Brandstaetter said, adding the automaker’s procurement task force was busy around the clock dealing with the issue which remained at the top of the agenda of the automaker’s management board.

Brandstaetter said the situation was expected to ease somewhat in the second half of 2021.

The chip shortage, which has hit automakers worldwide, emerges from a confluence of factors as automakers, which closed plants for two months during the coronavirus pandemic last year, rival against the sprawling consumer electronics industry for chip supplies. A factory fire suffered by Japanese chipmaker Renesas this year is also cited as a reason behind the chip shortage.