Paul van Gerven
15 December 2020

NXP has told customers that it must raise prices for automotive products due to a “significant increase” in material costs and a “severe shortage” of chips, according to a Reuters report. “To address the unforeseen increase in costs from our suppliers, we reluctantly must raise pricing on all products,” cites Reuters from a letter sent to the chipmaker’s customers. NXP confirmed the authenticity of the letter but declined to comment further.

Credit: Fotowerkt.nl

Volkswagen explained to Reuters that uncertainties due to the pandemic are still affecting the automotive supply chain. Bosch, like NXP a major automotive electronics supplier, is seeing major bottlenecks too. On top of that, the demand for cars in China has soared, as people prefer to avoid using public transportation. Electronics suppliers cannot keep up right now. Car manufacturing outside of China doesn’t seem to be affected, however.