{"id":114791,"date":"2021-05-21T08:43:31","date_gmt":"2021-05-21T08:43:31","guid":{"rendered":"https:\/\/fin2me.com\/?p=114791"},"modified":"2021-05-21T08:43:31","modified_gmt":"2021-05-21T08:43:31","slug":"chip-shortage-is-a-global-reality-may-persist-till-2022-bosch","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/chip-shortage-is-a-global-reality-may-persist-till-2022-bosch\/","title":{"rendered":"Chip shortage is a global reality, may persist till 2022: Bosch"},"content":{"rendered":"
Shortages of chips will impact the car market.<\/strong><\/p>\n <\/strong><\/p>\n Engineering and Technology company Bosch said that the shortage of semiconductors or chips is a global reality and the impact of this is for the world as much as for India.<\/p>\n Soumitra Bhattacharya, MD, Bosch reiterated what Bosch CEO Volkmar Denner said a few days back, that the shortages of chips will impact the car market and it could remain tight till 2022.<\/p>\n “Chip shortage is a ground reality and it affects the world markets and not just India.<\/p>\n “Tier-1 suppliers like us and our competitors depend on ECUs, which are supplied by tier-2 manufacturers.<\/p>\n “But one has to remember that automotive as a user of the chips is just about 10 per cent, the bulk of these chips are used for non-automotive segments like electronic products, which has seen a surge in demand,” added Bhattacharya.<\/p>\n Bhattacharya, while agreeing that supply chains are getting disrupted due to the chip shortages, the situation will continue to be challenging for CY21.<\/p>\n He also said that globally the company has put in a lot of finances to sort the issue with manufacturers, “but we cannot wish away the challenge.<\/p>\n “At least in India part capacities are being met.<\/p>\n “Unlike in other regions where OEMs have had to shut down,” said Bhattacharya.<\/p>\n In terms of future outlook for the auto industry, he said: “The auto industry was seeing itself on a road of recovery until early this year and Bosch Limited’s positive results is a validation to it.<\/p>\n “However, with the second wave being more severe, there is a clear uncertainty in the market.<\/p>\n “With 80 percent of our revenues driven through mobility business, we have been affected adversely.<\/p>\n “The challenge will be to manage the fluctuating demand, supply chain crisis and changing consumer behaviour all at once.”<\/p>\n The company also saw a dip in its capex plans for FY22 for the first time in several years.<\/p>\n The company will be investing Rs 200 crore as capex for FY22.<\/p>\n In the past the company’s capex would be in the range of Rs 350-500 crore.<\/p>\n “While capex for Bosch India which is the group entity should be in the range of Rs 400-600 crore for Bosch Ltd it will be in the range of Rs 160-200 crore,” said Bhattacharya.<\/p>\n Over the past two years and including this year, Bhattacharya said the company has invested Rs 800 crore in its Adugodi campus in Karnataka.<\/p>\n