Semiconductor chip supply to normalize in 2022, says Mexico’s auto industry By Reuters

MEXICO CITY (Reuters) – A global semiconductor shortage that has weighed on Mexico’s auto sector should normalize throughout the year and chip supply should reach pre-pandemic levels in the second half of 2022, the Mexican Automotive Industry Association (AMIA) said on Tuesday.

“We expect the shortage of semiconductors to stabilize throughout the year and towards the second semester they may return to levels that we had prior to the pandemic,” AMIA head Fausto Cuevas said in a press conference.

Official data last week showed that Mexico’s auto production and exports fell in January from a year earlier, the seventh straight monthly decline, as COVID-19 pandemic shocks and the semiconductor shortage has hurt the sector.

A return to more normal supplies of semiconductors would allow Mexican carmakers to increase use of installed capacity.

“It seems to me that every time there’s enough supply (of semiconductors), carmakers recover their previous capacity levels as soon as possible,” Cuevas added.

Vehicle production fell 2% in 2021 compared to 2020, the fourth consecutive annual decline, as the semiconductor shortage in recent months prompted automakers in Mexico and the rest of North America to implement rolling shutdowns, curtailing output.

AMIA has previously estimated output will not return to pre-pandemic levels until late 2023 or in 2024.