Hitesh Goel, associate director of Kotak Institutional Equities, on Wednesday said that the chip shortage issue is more of a global phenomenon.
The share price of Tata Motors, the owner of luxury car brand Jaguar & Land Rover (JLR), plunged 10 percent on Tuesday after the company raised concerns over chip shortage and expected a cash outflow of about £1 billion in the quarter ended September 2021.
Speaking in an interview with CNBC-TV18, Goel said, “The chip shortage issue is more of a global phenomenon and it will take about 7-8 months for this issue to get sorted out because new capacities take time to come up. Therefore, I do not see this issue getting resolved before 2021 yearend.”
“Chips are used everywhere now because we are moving to a connected world. So even in small cars, you will see a lot of chips being used for electronics, but in luxury cars, there are more sensors. So, luxury cars makers get more features because of customer demand. So, the semiconductor chip usage in a luxury car is significantly higher than a small car and so they are impacted more than small cars,” he said.
For the entire interview, watch the video.