Semiconductor shortage to be cleared by middle of next year, says Nissan

Japanese car giant Nissan says the worst of the semiconductor crisis should be over – and vehicle production could return to normal – by the middle of next year.

A shortage of semiconductors has crippled the global automotive industry throughout the COVID-19 pandemic, and car companies have so far struggled to accurately forecast an end to the crisis.

Factories are adjusting their production schedules on a weekly basis – for better or worse – which in turn has led to inaccurate or outdated information being passed on to dealers and customers.

While the semiconductor crisis has been frustrating for car buyers stuck in the new queue for a new motor vehicle, it has caused havoc with shipping plans and dealership cashflow.

Showroom staff don’t get paid a sizeable portion of their wages until each car is delivered and in a customer’s hands.

Now Nissan – the fifth biggest car maker in Japan and the third biggest automotive conglomerate globally when its sales are bundled with its 'alliance' partners Renault and Mitsubishi – says there is light at the end of the tunnel.

When asked when production might return to normal and new-car buyers might receive more accurate arrival timing, the boss of Nissan Australia, Adam Paterson, told Drive: “We believe that our Nissan supply will be much stronger in calendar Q1 (the first three months) of next year.”

Given the time it takes for vehicles to be shipped to Australia, it means a return to normal stock levels in showrooms will likely be in the weeks leading up to June 2022.

“The expectation is that we will be somewhat back to normality at that point,” said Mr Paterson.

“Things may change, but … from an on-the-ground supply standpoint (in Australian showrooms), we expect at this point that things would be back to a regular supply situation by the middle of next year.”

When asked why it was so difficult for Nissan and other manufacturers to forecast Australian showroom arrival timing for new models, Mr Paterson said: “Because we get late information from suppliers; it’s a very fluid situation.”

However, the executive said, Nissan and the rest of the auto industry was doing the best it could to return to “pre-COVID” production forecast accuracy.

The semiconductor shortage slammed the brakes on the car industry worldwide because each modern motor vehicle has between 300 and 3000 semiconductors (or computer chips) that control everything from the engine, to the electronics, infotainment and safety systems.

Each semiconductor takes up to 26 weeks – half a year – to manufacture from start to finish, and they are made in an environment 100 times cleaner than a surgical operating theatre. 

Production of semiconductors is largely controlled by firms in Taiwan, China and Singapore.

Each semiconductor factory costs in excess of $7 billion and takes up to 18 months to build.