The ongoing semiconductor shortage will cost the auto industry globally $210 billion in lost revenue this year, the consulting firm AlixPartners said Thursday, up from its estimate in May of $110 billion.
AlixPartners also said that production of 7.7 million units will be lost in 2021, up from 3.9 million in its May forecast.
"There’s no room for error for automakers and suppliers right now; they need to calculate every alternative and make sure they’re undertaking only the best options," Mark Wakefield, global co-leader of the automotive and industrial practice, AlixPartners, said in a statement.
A wave of delta-variant cases in Malaysia, Vietnam and the Philippines is also causing production delays at factories that cut and package semiconductors,
“Of course, everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” Wakefield said.
Wakefield said chips are just one of a "multitude of extraordinary disruptions" the auto industry is facing, "including everything from resin and steel shortages to labor shortages."
Big tech and auto giants were attending a White House meeting Thursday to discuss the global chip shortage.
Senior executives from Apple (AAPL) - Get Apple Inc. (AAPL) Report,, Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report, Samsung, General Motors (GM) - Get General Motors Company (GM) Report, and Ford (F) - Get Ford Motor Company Report were among those attending the meeting.
At the meeting, U.S. Secretary of Commerce Gina Raimondo asked companies to fill out questionnaires to clarify how much supply and demand there really is in the market, and said the administration would consider invoking the Defense Production Act to compel them to provide the information if they don’t comply, the Washington Post reported.
Last week, the London research firm IHS Markit slashed its forecasts for auto output due to the semiconductor shortage.
The firm cut its estimate by 6.2%, or 5.02 million units, to 75.8 million units for this year.
For 2022, it cut its estimate by 9.3%, or 8.45 million units, to 82.6 million units.
“This is the largest single adjustment to the outlook in what has been a turbulent past nine months,” the economic research firm said.
Earlier this month, Intel's (INTC) - Get Intel Corporation (INTC) Report Chief Executive Pat Gelsinger said the semiconductor stalwart planned to build new chip-making factories in Europe, investing up to $95 billion.
Geslinger has said he expects the shortages to last until 2023.