Daily Management Review

‘Very Serious’ Chip Shortage Globally Will Affect Daily Operations For Months, Warns Porsche CEO


‘Very Serious’ Chip Shortage Globally Will Affect Daily Operations For Months, Warns Porsche CEO
A “very serious” shortage of semiconductors globally could affect the daily operations over the coming months at the German luxury car maker Porsche, warned the company’s chief executive.
“The semiconductor topic is a very serious one because the whole industry is affected because of the big demand of consumer electronics and the faster return of the automotive sector,” said Oliver Blume, chief executive of Porsche, in a television interview.
“We could be affected every day, so we watch very deeply (over) the next days and months what we can do. We have to relax short term and look for measures long term,” Blume said.
The comments from the executive comes at a time when the global auto industry is suddenly faced with a shortage in essential chip components for vehicles after the entire industry went through a very bad phase last year because of the Covid-19 pandemic. The assembly lines of vehicle makers that are dependent on chip in the global car industry were brought to a standstill because of its supply shortages which also held up manufacturing of hundreds of thousands of vehicles globally.
During the Covid-19 pandemic, there was a surge in demand from consumers for games consoles, laptops and TVs because of reduced mobility of consumers which consequently resulted in shortage of these chips or semiconductors.
Currently, many of these products — which includes some Chromebook laptops and next-generation consoles such as the Xbox Series X and the PlayStation 5, have either been sold out or are facing lengthy shipping times.
According to analysts, the automotive sector has been especially hit by the chip shortages due to the “just-in-time” supply chains of the global auto industry as the auto industry has depended for decades on this form of lean manufacturing system to reduce costs of operations and from preventing capital being locked up.
In reply to the question of whether its supply chain model could be reconsidered by Porsche because of the current situation, Blume replied: “Yes. That is very important for the future to think about the supply chain.”
“We have to think about what storage do we need really for all these stocks. We have to be more flexible and we have to plan more deeply the immediate capacities,” he added.
So far this year, there has been a 15 per cent hike in the shares of Porsche listed on Germany’s Xetra Dax indexdate. However the prices have changed .little over the last 12 months.