Will the semiconductor chip shortage ease in 2023?

Will the semiconductor chip shortage ease in 2023?

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The semiconductor chip shortage has been ongoing for several years now with very little improvement. And supply issues, inflation, and labour shortages have all contributed to a slowdown in the production of new vehicles.

So, what does 2023 have in store?

Is the road dark ahead, or is there light at the end of the tunnel?


Is the semiconductor chip shortage continuing into 2023?


With the push towards producing more electric vehicles (EVs), the demand for semiconductor chips is growing constantly. And this is backed up by the chief executive of leading chipmaker Onsemi, Hassane El-Khoury:

We have already sold out of semiconductors used in electric cars until the end of 2023 due to high demand.

However, it’s not all doom and gloom.

While demand is outstripping supply in terms of chips, vehicle production is starting to ease.


UK car production increased in 2022.

According to figures released by the Society of Motor Manufacturers and Traders (SMMT), approximately 80,091 cars left UK factories during November 2022, a 5.7% increase compared to the 75,756 recorded in November 2021.

A positive step indeed, one celebrated by SMMT chief executive Mike Hawes:

It was something to cheer before Christmas, and it gives us renewed hope for 2023.

Great news for car production, but sales didn’t follow the same trend.


UK car sales dropped in 2022.

While production increased, sales dropped in the past twelve months. Around 723,846 cars left the showroom in 2022, compared to 797,265 in 2021 – a decline of 9.2%.

However, the slowdown in sales has resulted in more cars being available for purchase. Great news if you’re looking for a new purchase, whether that’s a Ford Transit Van, Fiesta, Mercedes or something else.


Will the chip shortage ease at all in 2023?

Experts in the motor industry are predicting the chip supply shortage will improve slightly. In 2022, 4.55 million vehicles were axed from production due to the microchip shortage. This figure is expected to drop to 3 million in 2023, increasing production by 1.55 million.

Meanwhile, the industry will benefit greatly from China's relaxation of lockdowns, which is putting in place plans to increase chip and vehicle production.

It might take some time, but 2023 looks set to be the year we finally see a revival in chip production.

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