Core Insights - The automotive industry is facing a potential supply chain disruption due to a shortage of dynamic random-access memory (DRAM) chips, which could lead to material downside risks for global vehicle production [1][8]. Industry Impact - The demand for higher-end memory chips is increasing, driven by the data center boom, which is causing significant price hikes exceeding 100% [8]. - Automakers and parts manufacturers rely on older, less advanced memory chips compared to those used in AI servers and data centers, both of which are affected by a constrained supply of silicon wafers [8]. Company-Specific Risks - Major DRAM manufacturers, including Samsung Electronics Co., SK Hynix Inc., and Micron Technology Inc., are prioritizing the more profitable data center segment over automotive applications, which could exacerbate supply issues for car manufacturers [5][8]. - Companies more exposed to advanced driver-assistance systems and electronic components, such as Visteon Corp. and Aumovio SE, are identified as being at higher risk, with Tesla Inc. and Rivian Automotive Inc. facing more downside compared to Ford Motor Co. and General Motors Co. [6][8]. Historical Context - Previous semiconductor shortages during the Covid-19 pandemic resulted in car manufacturers losing output of millions of vehicles [7]. - Recent production idling by manufacturers like Honda Motor Co. has been linked to disruptions involving Nexperia BV, a chipmaker that was recently taken from its Chinese owner by a Dutch court [7][8].
AI data center boom risks roiling global carmaker supply chains
The Economic Times·2026-01-22 05:12