The COVID-19 pandemic has slowed the production of cars due to the semiconductor shortage. Over two years from the start of the pandemic, there is still a wide gap between chip supply and demand, which has a direct impact on the automotive industry. In fact, the use of chips in this industry is growing at a fast rate and will keep growing in the foreseeable future. Right now carmakers have idled production of certain vehicles due to the lack of chips. As a result, shares of major semiconductor producers have been heavily pressured despite the strong demand for chips. 

Here below we present a strategy that allows to benefit from the current context.

Stellantis (STLA FP) is a leading global automaker with a broad brand portfolio, such as Maserati, Jeep, and Citroen. Its Q1 2022 net revenues were up 12%, reaching €41.5 bln, compared to €37 bln in Q1 2021. This increase reflected strong pricing and vehicle mix, as well as favorable FX translation effects, offsetting production losses due to unfilled semiconductor orders. 

Nvidia (NVDA UW) is the largest chip company in the US by market value. The company is predicting booming demand for greater automation in cars that will outpace the challenges posed by the global chip shortage. FY 2022 was a record-breaking year for Nvidia, with revenue up 61%, from $16.7 bln in FY 2021 to $26.9 bln. 

Volkswagen (VOW3 GY) is a Germany-based company that manufactures and sells vehicles. The group posted strong financial results during the first quarter, despite the difficult global environment. The main drivers were improved sales, better pricing and cost discipline. This way, the company was able to mitigate the impact from worldwide semiconductor shortages. Its sales revenue, equal to €62.7 bln, was up 0.6%. The operating profit of €5 bln lies significantly above previous year and underlines the robustness of the business. Based on the figures and the expected better semiconductor supply in the second half of the year, the group confirms its outlook for 2022.