Page 27 - TTG-Taiwan Transportation Equipment Guide (TTG)2022-04 Edition

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Industry News

Taiwanese suppliers to tap into aiwanese suppliers to tap into
T

increased global market demand eased global market demand
incr
amid tighter conditions
amid tighter conditions

By Stephanie Chao

While many industries in Taiwan experienced a sector demand in other areas, specifically
boom in orders, parts of the world saw shortages automotive steel. Automotive brands have cut
and repair services unable to meet demand due to long-term contracts as the steel demand required
disrupted supply chains since the pandemic began for vehicle production remains too uncertain.
in 2020. Overall, research studies and experts Disruptions on the chip side of the situation also
expect similar tight conditions going into 2022, have pushed back the forecasted rebound of
and could only ease up in 2023, but also off ered a supply. While semiconductor makers had quickly
tentative silver lining. set out to build new fabs last year, new production
lines will still require another three to four years
For instance, global rating agency Fitch Ratings before coming online.
suggested global auto industry conditions would
improve in 2022, though pointed out that the strong The outlook for EVs remains strong, as
supply and demand mismatch, which led to a Bloomberg’s research service leg for new energy
very strong vehicle net pricing and mix in 2021, technologies, BloombergNEF forecasted global
will continue on into 1H22. Normalized pricing, passenger EV sales to surpass 6.3 million by the
mix, and margin is on the table due to increased end of 2021, largely prompted by increasingly
production and rebuilt inventories in the 2H22. On stringent climate-related emissions regulations,
the other hand, rising raw material prices for base the rapid growth of EV sales, and the continued
metals could put a dent in profitability, especially development of self-driving cars. Demand for these
for prevalent automotive electronics and electric vehicles will almost certainly squeeze automakers
vehicles (EV), which require EV battery modules to from several fronts, however the aforementioned
run. chip shortages and developing charging
infrastructure not yet in place could temper market
S&P Global Platts Analytics projected that the demand.
shortage hindering global vehicle production is
poised to persist into 2022 before supply catches up Auto Brands Forge Ties with Chip Makers
with demand in early 2023. Light-vehicle production
in 2022 is expected to fall short of 5.7 million units Aside from strained supply in pre-pandemic
in light of the supply disruptions, further hampering times and increasing applications of semiconductors