Saturday 11 September 2021
Books – Muhammad Jamal:
The global auto industry and trade sector is still in a state of confusion and confusion since the beginning of this year, due to the shortage of factories feeding with electronic chips “semiconductors”, which prompted many companies to take decisions to partially close and reduce production operations and others.
Experts expect that the shortage of electronic chips caused by the Corona pandemic will worsen, and will continue for a longer period than expected, perhaps up to the first quarter of 2023 as a result of the presence of successive waves of the mutated Corona virus.
Japanese electronics company Toshiba Corp has said that it will not be able to meet the demand for electronic chips, used to regulate the transmission of power, for another year, and until the end of 2022 at best, which presents a new warning for manufacturers of cars and industrial machinery that are already struggling.
The auto industry around the world depends on chip factories in Southeast Asia, especially Korea, Taiwan, China, and also the United States, which may differ in the coming years as countries seek to localize their various industries; To avoid a recurrence of the current crisis.
The global electronics sector consumes 470 billion US dollars of “semiconductors” annually, compared to 40 billion dollars in the automotive sector.
With the study of many countries of the world opportunities to localize the industries of electronic chips, articulated in many electronic industries, especially the automobile industry; Why doesn’t Egypt invest this crisis in its favor and launch the “electronic chip” industry on its land?
Eng. Khaled Saad, Secretary-General of the Association of Automobile Manufacturers, said that launching the electronic chip industry on the land of Egypt is very difficult and amounts to impossible, for several reasons, most notably the small size of the Egyptian car production rates compared to the global market, in addition to the fact that the local sector does not work on manufacturing, but assembly.
Saad added in a statement to “Masrawy” that the number of cars that are assembled locally in Egypt ranges from 40 to 70 thousand cars annually of all kinds, “transportation – semi-transportation – buses – owners”, which means that the Egyptian market is not very productive compared to the global market, which is completely excluded. The idea of entering an industry such as electronic chips, as it requires huge investments estimated at millions of dollars.
The Secretary of the Manufacturers Association clarified that the idea of investing in the “electronic chip” industry was merely put forward, citing that Egypt owns nearly 17 car factories, and each factory produces from 5 to 10 thousand cars annually, which confirms the impossibility of spending hundreds of millions of investments on this volume of production.
When asked about the entry of the electronic chip industry into many industries besides the automobile industry, especially electronic devices and mobile phones, and the extent to which this enhances the idea of Egypt’s investment in this industry, Saad stressed that this amount of the local industry is not motivated to invest in the electronic chip industry, as well as the volume of manufacturing. Enough to cover this project.
On the other hand, Ali Tawfik, head of the Egyptian Association for Feeding Industries, stressed that the current crisis that the year is experiencing due to the lack of electronic chips has shown the extent of the fragility of the manufacturers, and that Egypt must break into this industry, and that it will not only enrich us in the field of the automotive industry, but will also enter many industries. the other.
Regarding the “chip” crisis exacerbating so quickly, Tawfiq said that the crisis is beyond the capacity of manufacturers due to the spread of the Corona virus “Covid-19”, which led to many companies declaring their direction in helping governments to resist the pandemic by converting some production lines to manufacture respirators and masks. , which helped create a production gap at the expense of the automobile industry.
Tawfik opposed the opinion of Engineer Khaled Saad, Secretary of the Association of Automobile Manufacturers, regarding the impossibility of Egypt investing the electronic chip crisis in its favour, stressing that Egypt has the ability to storm this industry strongly, explaining that Egypt has some factories in this field, most notably a factory in the Sixth of October City for the late businessman. Dr. Ahmed Bahgat.
Tawfik stressed that the current crisis that the world is experiencing due to the lack of chips, is a great opportunity for Egypt that must be exploited well and wisely, to feed Europe, the Middle East and Africa with electronic chips, which at the present time are exclusively for some Southeast Asian countries.
He demanded that this industry be settled in Egypt in cooperation with international companies that own property rights or the right to know and have long experience in the manufacture of electronic chips.
He pointed out that Egypt already has existing projects in the field of manufacturing cars and electronic chips, and what we need is to expand the current investments, especially since it has the right to ownership and knowledge.
The head of the Feeding Industries Association called on officials in the Egyptian state to communicate with international chip manufacturers and urged them to invest in this field inside Egypt, and work to provide all facilities, privileges and support for exports, customs exemption, privileged lands, and electricity support for factories, as well as providing air transport services for export to all European countries. .
Major General Hussein Mostafa, an expert in the Egyptian car industry, had confirmed that Egypt has a good opportunity to enter the world of the chip industry, pointing out that the establishment of an electronic chip factory may cost approximately $ 5 billion (78 billion and 500 million Egyptian pounds), which is a value that international companies can pay. In exchange for finding a supplier of chips soon to car production sites in Europe.
Reports indicate that the global auto sector is on the way to losing nearly 7 million cars that were scheduled to be produced by the end of the current world, due to the scarcity of electronic chip supply chains, of which between 100 and 150 chips are involved in the operations of a single car.
And last April, the Japanese company Mitsubishi Motors, one of those affected by the lack of chips, announced its intention to reduce its production globally in May by 16,000 cars due to its inability to provide supplies of electronic chips to factories.
Also, earlier in the fourth month, the leading German company, Mercedes-Benz, decided to reduce working hours in a number of its factories, against the backdrop of a shortage of electronic chips.
Herbert Diess, CEO of the German car maker Volkswagen, recently warned that a shortage of… chips The electronic used in the current automobile industry may continue for years to come.
In search of a solution to the crisis inside her country, Kamala Harris, Vice President of the United States on a shuttle trip to Singapore last August In an attempt to find a solution to the dilemma of the semiconductor supply shortage that has disrupted production operations in the automotive and electronics industries in America.
The administration of President Joe Biden has been engaged for months in attempts with the industry and parliament on ways to reduce the crisis, without significant improvement so far.
It is noteworthy that the global auto sector incurred losses in the first quarter of 2021 amounting to about 14 billion dollars (219 billion Egyptian pounds), and it is expected, according to reports, to reach 61 billion dollars by the end of the year.