“Chip shortage equals demand for toilet paper,” compares Elon Musk – Executive Digest

Elon Musk, in a post on Twitter, compared the shortage of chips in the global market to the increased demand for toilet paper that occurred during the pandemic, and blamed large companies that pre-purchase an unnecessary amount of semiconductors.

Our biggest challenge is the supply chain, especially microcontroller chips. He didn’t see anything like it.

Fear of running out is causing every company to over-demand — like toilet paper shortages, but on an epic scale.

However, it is not a long-term problem.

– Elon Musk June 2, 2021

Our biggest challenge is feeding the company’s supply chain, especially semiconductors. I’ve never seen anything like this,” admitted the Tesla CEO.

He defended “the fear of some entities that they will run out of chips and that most companies will not have enough semiconductors”, as he defended the “Emperor of Mars”.

During Tesla’s first-quarter earnings presentation last April, the CEO actually described the shortage as a “big problem” for the brand and “the most difficult challenge ever for the company.”

Such was the dimension of the problem that Tesla had to raise car prices and, like other brands, cut costs by removing features deemed unnecessary in production cars, such as lumbar support for the Model 3 and Model Y SUV seats.

A report released last month by consultants AlixPartners estimates that large car companies will lose more than 100 billion euros in sales this year due to the acute shortage of semiconductors.

In May, the world’s largest player in chip production and owner of 57% of the revenue produced in this market, Taiwan Semiconductor Manufacturing promised to increase semiconductor manufacturing by 60% this year. So far, the company has not yet reached this number.