Chips challenge to last rest of 2021- ZF CEO

As the world struggles to meet the enormous demand for chips, the industry is recovering, and the trend toward homeschooling is expected to last at least temporarily, according to ZF, which anticipates that this year's challenges in semiconductor supply will continue with programs adjusted into 2022.

One of the numerous repercussions of the epidemic has been the tremendous demand for semiconductors, which has been fueled by government-mandated stay-at-home directives boosting domestic computer demands for both domestic working arrangements and gaming Market in the absence of outside entertainment.

Many have questioned if local semiconductor production has to be increased in an effort to prevent the bottlenecks that are now being experienced throughout the world and which have created various industry issues due to reliance on foreign chip supply.

At the German supplier's presentation of its half-year results from its headquarters in Southern Germany, Wolf-Henning Scheider, CEO of ZF, told just-auto that "basically, overall industry around the world - [there] was significant demand."

"It began in 2021 and covers all industries, including PCs and home offices with radio towers. They require these chips, hence a longer period of capacity adaptation is required.

"I anticipate that this scarcity will continue through this year, and in 2022, we will need to make adjustments to our programs to make room for capacity."

We communicate with chip makers and clients on a regular basis. The supply chain was kept maintained by us. Demands have reached an all-time high as a result of the shortage.

The ZF CEO included the devastating floods that caused such devastation in Germany two weeks ago, forcing the supplier's facility in Ahrweiler, south of Cologne, to temporarily close, in his remarks. After transferring to the second story, the seven employees who remained on the premises were safely rescued the next morning.

As the flood tore through the center of the West German town, pictures show enormous amounts of household furniture being flung onto the streets. According to one estimate, an underground parking garage was pumping out 12,000 liters of water each minute.

Within a relatively short period of time, ZF employees worldwide raised EUR0.5 million (US$594,000) through donations that are still coming in and the supplier's EUR0.5 million contribution that was sent to its non-profit organization, ZF Hilft. The factory won't start operating at full capacity for a few months, said Scheider. "The assembly line has to be completely redesigned."

According to Friedrichshafen's financial reports, revenues increased dramatically in the first half of 2021, rising by 43% to EUR19.3 billion (US$23 billion), from EUR13.5 billion in the first half of pandemic-stricken 2020.

Compared to a loss of EUR177m in the first half of 2020, adjusted EBIT was EUR1bn.

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