Auto chip demand recovers, but restocking remains elusive

While automotive chip demand shows signs of recovery, the lack of inventory rebuilding signals lingering supply chain uncertainty. Technologically, this delays advanced process node capacity deployment, particularly affecting AI and high-performance chip integration. Geopolitically, tightened export controls in the U.S. and EU increase operational costs for chipmakers and automakers, especially under supply chain constraints. In competitive dynamics, leading firms like TSMC and Infineon may accelerate vertical integration to mitigate short-term volatility. Over the next 12 to 24 months, if automakers continue with just-in-time procurement, price instability and extended inventory cycles will likely persist, slowing industry recovery.