Friday, 24 September 2021 17:00

Elon Musk: Chip Shortage a ‘Short Term’ Problem Likely Over Next Year

Written by Simon Alvarez, Teslarati


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During an Italian tech event streamed Sept. 24, Tesla CEO Elon Musk predicted the ongoing semiconductor crisis would likely be over next year.

Musk also said he believes the global chip shortage issue is a “short term” problem and not one that would be true for the long term. 


Musk said “there’s a lot of chip fabrication plants that are being built, and I think we will have good capacity by next year,” though he did not specify what facilities he was referencing. Noted chipmakers such as Intel and TSMC have unveiled plans to expand their presence in the U.S. to boost their supply, but the planned factories are not expected to come online anytime soon. 


Glenn O’Donnell, a vice president research director at Forrester, an advisory firm, said he believes the chip shortage could last well into 2022 and perhaps even up to 2023.


“Because demand will remain high and supply will remain constrained, we expect this shortage to last through 2022 and into 2023,” O’Donnell said.
Musk’s statements are difficult to discount, considering Tesla is arguably the carmaker handling the ongoing chip supply issues best. During the Q2 2021 earnings call, Musk revealed Tesla was able to respond to the global semiconductor shortage by rewriting its vehicles’ software and using alternative chips. 


“We were able to substitute alternative chips and then write the firmware in a matter of weeks. It’s not just a matter of swapping out a chip. You also have to rewrite the software. So it was an incredibly intense effort of planning new chips, writing new firmware, integrating it to the vehicle and testing it in order to maintain production,” Musk wrote. 


Efforts are also seemingly underway to...

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