Automakers and other manufacturers need to collaborate with chipmakers directly and consider some form of investment in capacity.

While makers of PCs and cellphones are suffering production delays because of the current global semiconductor shortage, no industry has been as hard hit as the automotive industry: while automakers account for about 10 percent of global semiconductor sales, we estimate that they will suffer about 80 percent of the $125 billion in lost sales due to the shortage.

Automakers were hit harder and sooner than other industries because they lack the close partner relationships with semiconductor suppliers that other customers developed over time. Despite the rising importance of semiconductors in their products, automakers have not treated chips as critical components and rely mostly on third parties to deal with chipmakers.

While there are no quick fixes due to the time and costs it takes to bring new capacity online, there are concrete measures automakers and other manufacturers can take to minimize the impact of future shortages, such as collaborating directly with chipmakers and investing in some form in chipmaking capacity.

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