After Ford's Semi Shortage Meltdown, Morgan Stanley Says Industry Won't Recover Until "Well Into 2022"

"Ford said it anticipates a 50% reduction in its planned second-quarter production due to the semiconductor shortage. That’s far worse than the 17% reduction in planned production in the first quarter.

"Ford sees a $2.5 billion cost from the semiconductor shortage (at the high end of what CEO Jim Farley had said), but it hopefully expects Q2 'to be the trough' of the impact."

Ford CFO John Lawler's commented on the chip shortage: 

“Semiconductor availability, which was exacerbated by a fire at a supplier plant in Japan in March, will get worse before it gets better. Currently, the company believes that the issue will bottom out during the second quarter, with improvement through the remainder of the year.”

Two weeks prior to Ford's report, we wrote about how the chip shortage was becoming a self-fulfilling prophecy, due to a shortage of chip-making equipment. In the days leading up to that report, we wrote that Taiwan Semiconductor (TSM) was also warning that the global chip shortage may extend into next year.

In early April, we wrote that U.S. exporters of semiconductor chip-making tools were struggling to get licenses to sell to China. The U.S. government had been dragging its feet in approving licenses for companies to sell chip-making equipment to Chinese semi company SMIC, we noted at the time.

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Thomas Callahan 1 month ago Member's comment

Almost bought some $F a couple months ago. $NIO got hit, I’m a holder there. Only good news is this shortage will slow everybody down who wants to get into EV.