(Yicai Global) Dec. 7 -- Demand for automotive microprocessors is skyrocketing as China’s car industry recovers more swiftly than expected from Covid-19, inducing a shortfall in supply. NXP Semiconductors and Renesas Electronics and other chip suppliers have raised their prices of their products as a result.

NXP “reluctantly” raised prices of all its lineup to cope with surging material costs and a severe product shortage, the firm told its customers.

“We always help our clients solve supply problems,” the company told Yicai Global. The wafer shortage will continue into next year, and NXP is likely to raise the prices by at least 5 percent, the market predicted.

Semiconductor maker Renesas Electronics will also hike prices of some analog and power products from Jan. 1. The firm, which is now operating on overdrive and still has a tight schedule for product delivery, predicts the dearth will go on until the end of the first quarter. The firm notified its customers of its price rises on Nov. 30.

“The chip supply has been tight since the fourth quarter. It may be hard to raise costs of parts and components because the average main engine plant won’t accept a price rise. This is a difficult situation for us as a supplier,” an executive with a Chinese maker of parts for advanced driver assistance systems and cameras told Yicai Global.

Main engine plants will take the price rise in stride as they transit from conventional electric assembly to electric systems, Zheng Yun, senior partner and senior vice president China of German international management consultancy Roland Berger, said to Yicai Global.

The world’s top five automotive semiconductor manufacturers are Germany’s Infineon Technologies, the Netherlands-based NXP, Japan’s Renesas, the US’ Texas Instruments and Switzerland’s STMicroelectronics, per 2018 operating revenue statistics.

China imports 95 percent of its auto wafers since developed countries monopolize advanced sensors, in-vehicle networks, batteries, engines and electric control systems, chassis electronic control, ADAS, and key system chips for autonomous driving.

Editor: Ben Armour, Xiao Yi