Tesla’s Elon Musk calls chip shortage ‘short-term’ problem

Tesla’s Elon Musk calls chip shortage ‘short-term’ problem
Tesla (TSLA) Chief Executive E lon Musk isn’t too worried about the semiconductor shortage that is hampering auto production, saying he expects the issue to be “short term.”

Musk’s optimism comes from the production expected from new semiconductor plants that are planned or under construction.

“There’s a lot of chip fabrication plants that are being built,” Musk said during a joint session with Stellantis (STLA) and Ferrari (RACE) Chairman John Elkann, at Italian Tech week, Reuters reported.

“I think we will have good capacity for providing chips by next year.”

The global semiconductor shortage for nearly a year has caused grief for automakers, as the COVID-19 pandemic has hurt assembly lines in Southeast Asia.

Production delays in Malaysia, Vietnam and the Philippines are forcing automakers to cut production. That’s because the chips are essential to the new generations of vehicles, which require computing power.

The chip shortage and production delays have reverberated to cause much higher prices for purchased and rental cars.

On Thursday, the White House held its second semiconductor summit in five months, featuring companies like Intel (INTC), General Motors (GM), Ford (F), Apple (AAPL), Microsoft (MSFT), Samsung SSNLF and others.

At the meeting, the White House asked companies to clarify the supply and demand in the market, the Washington Post reported.

The chip shortages are expected to cost the auto industry $450 billion (U.S.) in global sales through the end of 2022, the Post reported.

Pat Gelsinger, CEO of Intel, the U.S.’s largest chipmaker, has said that he expects shortages to last into 2023.
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