Remember when there was a shortage of microchips in the automotive industry? Pepperidge Farm remembers. According to reports, images showing fields of almost-but-not-quite completed new cars awaiting One More Chip, along with manufacturers wildly deleting features like heated seats as if they were the mob deleting computer files, could be permanently in the rear-view mirror.
Reuters is quoting tech company Mobileye Global as a group of eggheads sounding the alarm on a “pullback in orders” from some of its customers. This, described as a clearing excess inventory, could hammer the company’s financial results this year and may spark a selloff in shares of auto chip suppliers.
For anyone whose eyes glaze over al Wall Street lingo (raises hand), this essentially is a warning that a few car companies may now have more than enough chips on hand with which to build their vehicles, thus flipping the script from the past couple of years in which saw chip makers holding all the cards. Indeed, the report goes on to suggest demand from Tier 1 customers (read: big OEMs) is likely to weaken thanks to recent moves which permitted them to build up their chip stocks and avoid shortages such as the ones which stubbornly persisted through the 2021 and 2022 calendar years.
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