The chip shortage is a ‘short-term’ problem, says Elon Musk

The CEO’s outlook is far more optimistic than other automotive industry leaders who believe it may last up to 2023-24.



Tesla, Inc. CEO Elon Musk disclosed on Friday (Sep. 25) that he’s confident the ongoing global chip crisis is going to be solved in the short term. When asked how long he thought the global semiconductor shortage would affect the automotive industry, Musk said: “short term I think.”

“There’s a lot of chip fabrication plants that are being built,” Musk said during a joint session with Stellantis and Ferrari Chairman John Elkann, at Italian Tech Week.

“I think we will have good capacity for providing chips by next year,” he added.

Tesla CEO Elon Musk Chip Shortages Production

Tesla CEO and SpaceX Founder Elon Musk

The two industry leaders agreed on potential support coming from nuclear power in order to cover for the increasing global power demands.

“I am surprised by a recent move away of some countries form nuclear energy, which is safe,” Musk said.

Chip Crisis Ushers A Wave of Investments

The Covid-19 pandemic has resulted in an increased demand for commodities for electronics and cars that the supply chain couldn’t handle, especially the microchip industry.

This chip shortage resulted into a domino effect that pummeled the automotive industry to the ground. Pat Gelsinger, CEO of Intel, a global semiconductor industry leader, recently said it would take another couple of years for the semiconductor industry to catch up to the growing demand.

The U.S.-based chipmaker is planning to expand its use of external foundries to produce a range of products. The executive also said that Intel will significantly expand its manufacturing operations and create semiconductor chips for other companies.

Earlier this year, Musk said that the global chip crisis is affecting Tesla, although he believes it’s not a long-term issue.

When discussing the electric vehicle maker’s performance this quarter, Musk said that Tesla’s biggest challenge is resolving the supply chain conundrum.

Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it. Fear of running out is causing every company to overorder – like the toilet paper shortage, but at epic scale. That said, it’s obviously not a long-term issue.

The CEO’s outlook is far more optimistic than other automotive industry leaders who believe it may last up to 2023-24.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

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