'Semiconductor shortage big chance for auto component cos'

New Delhi: Semiconductor shortage is a big challenge for the automobile industry right now but the situation could also turn out to be a big opportunity for the domestic auto component manufacturing industry, SIAM President Kenichi Ayukawa said on Thursday.

Speaking at the Automotive Component Manufacturers Association of India (ACMA) annual session, Ayukawa, who is also the Managing Director and CEO of Maruti Suzuki India, said the demand for the technology-based equipment has increased manifold in various sectors alongside the automotive segment.

"The challenge of COVID-19 continues globally. Different regions are being impacted at different times. While the global supply chain is already very complex, such disruptions and uncertainties further add to the challenge. Hence our preparation has to keep pace with the growing challenges," Ayukawa noted.

The global semiconductor supply chain has become increasingly at risk due to several factors and it has impacted the domestic auto industry since last year and continues to be a big challenge, he added.

"While the semiconductor shortage appears to be a challenge, it also brings in an opportunity. Of course, semiconductor manufacturing requires very huge investments. The Indian automobile industry alone can-not assure full viability of such an investment in semiconductor projects. Hence, there is a need for consolidation across sectors," Ayukawa said.

Rising to this critical challenge, the government is taking few long-term measures, he stated.

"The invitation by the government for expression of Interest for manufacturing semi-conductors in India is a much needed, long-term step, in the right direction. I am sure global investors will take advantage of this opportunity in India," Ayukawa noted.

In the meantime, the domestic component industry would have to tackle the current challenge of semiconductor shortage, by deeply engaging with the chip suppliers, he added.

Semiconductors are silicon chips that cater to control and memory functions in products ranging from automobiles, computers and cellphones to various other electronic items.

The usage of semiconductors in the auto industry has gone up globally in recent times with new models coming with more and more electronic features such as bluetooth connectivity and driver-assist, navigation and hybrid-electric systems.