GlobalFoundries, which makes basic chips for everything from cars and phones to toys and power tools, says chip capacity
is growing at half the needed pace.
About a week ago, I spent a few hours at my local Chevy dealer buying out the lease on my 2018 Bolt, with brand new
batteries—the old ones were recalled because they risked bursting into flames.
While working on the paperwork in the eerily quiet dealership, the salesman told me there were cars that had been sitting in the service department for weeks waiting for the arrival of parts—computer chips, in particular. He said sales at the dealership had dropped by about 90% from prepandemic levels, and most of the sales staff had been laid off. It’s all because they have almost no inventory. By now, you likely know the cause of the inventory shortage—auto makers can’t make cars if they don’t have chips. Cars used to be cars. Now cars are computers.
Some automotive experts have suggested the problem is easing. On an earnings call with analysts this month,
(ticker: GM) CEO Mary Barra said the company—which makes the Bolt—is seeing the chip situation improve. “By the time we get to [the] third and fourth quarter, we’re going to be really starting to see the semiconductor constraints diminish,” she said.
I’m skeptical. The chip shortage is complicated, and companies with capital to throw around can push their way to the front of the line. And the issues are more severe for some parts than others. So maybe GM has this figured out, and empty Chevy dealer lots will soon be filled with shiny new Bolts and Silverados. But Barra’s optimism runs counter to other data points suggesting the chip supply issue will be here for a long time.
I got a…