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Chip shortage could drag on for a year: AutoNation CEO

Friday, April 30, 2021 5:44 PM | Anonymous
The global semiconductor shortage that’s crippling the auto industry could drag on for as long as a year, according to Mike Jackson, chief executive of AutoNation, the largest car-dealer chain in the U.S.
AutoNation expects the industry’s vehicle shipments in the second quarter to be double what they were a year ago, but that’s barely enough to keep dealer lots full, Jackson said in an interview.
"The supply chain is fragile and disrupted because of the chip shortages and still dealing with the pandemic," he said.
Low interest rates, stimulus checks, and a desire for private transportation during the pandemic are fueling demand for vehicles, while assembly plants are sitting idle because of a lack of chips. Dealerships have been increasing used-car sales to make up for the lack of new supply.
"I see it continuing for at least the next year, the extraordinary demand, and I see no resolution on the microchip side for six to nine months, or a year," Jackson said.
Memory chip prices soared in 2017 and 2018 but declined in 2019 and 2020 amid sluggish demand from the PC and smartphone markets. In response, top chipmakers, including Samsung, SK Hynix, and Micron Technology, curbed their output before the pandemic.

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