The auto industry may be headed for another chip crunch. Last time, it was the pandemic that snarled supply chains and threw the chip market out of whack. This time, the AI boom is squeezing the supply of the basic semiconductors that modern cars rely on.

 

The CEO of Dutch semiconductor manufacturer Nexperia, Stefan Tilger, told Reuters that competitors had shifted supply for commodity semiconductors toward chips used in AI data center. And since a great deal of that production was once dedicated to mature chips (like those used in cars and other industrial equipment), a bottleneck is quickly brewing in the automotive supply chain. The auto industry is "suffering quite heavily," he said.