Russia-Ukraine conflict could further weigh semiconductor supply shortage

The Frencken Group said the supply shortage will remain a challenge for the automotive industry.

The conflict between Russia and Ukraine has added to the challenges in the supply of semiconductor chips for the automotive industry, the Frencken Group said.

Frencken Group Executive Director Dennis Au said there was no significant change in the supply shortage seen at the beginning of 2022, in comparison to the second half of last year.

“Apart from the semiconductor supply chain disruption, the Russia–Ukraine conflict has also led to challenges in the supply of automotive electrical harness, which exacerbates the impact on automakers’ production,” Au said.

Whilst recognizing the conflict has affected the world from a macro perspective, he clarified that the conflict had no major direct impact on the automotive industry so far.

“The Group has not experienced any major direct impact from the Russian-Ukraine war to-date, although the automotive industry has seen supply chain challenges,” he said.

“However, from a macro perspective, businesses around the world could face cost pressures due to higher energy prices, supply chain disruptions, and upward pressure on prices of raw materials such as aluminium.”