AI data centers are acquiring the capacitors that automakers require.

      Chinese automakers report a global shortage of printed circuit boards and multilayer ceramic capacitors, with deficiencies ranging from 20% to 30% and prices having more than tripled in the past year, largely due to demand from AI data centers. In a span of three months, automotive memory prices surged by approximately 180%.

      The AI surge has impacted even the most affordable components in vehicles. These shortages are not limited to high-end parts; for instance, a ceramic capacitor is extremely inexpensive, and a modern car equipped with driver assistance systems can contain thousands of them.

      The issue is primarily physical rather than financial. According to Geely’s Dai Yong, the shortage of boards and capacitors disrupts assembly lines and production, posing a different challenge than simply facing higher costs.

      The driving force behind this demand is data centers. Industry insiders predict it will take at least a year to build up global supply to satisfy the concurrent needs of AI infrastructure and automotive manufacturers.

      Memory components are also a significant part of this squeeze. Automotive-grade memory experienced a rise of about 180% over three months, as companies like Samsung, SK Hynix, and Micron have diverted over 80% of their advanced-node capacity to AI servers, contributing to the shortage that increased Pixel prices.

      The automobile sector is demanding much more memory as well. A basic level two driver assistance system requires around 8GB, whereas features for urban navigate-on-autopilot can demand upwards of 300GB.

      Consumers are already feeling the effects. More than ten Chinese electric vehicle manufacturers have raised prices or reduced discounts by 2,000 to 6,000 yuan. BYD has increased its charges for driver assistance, and General Motors has warned of impending cost hikes.

      This shortage is the same issue that has permeated consumer electronics throughout the year, leading to the discontinuation of the $599 Mac Mini and prompting Microsoft to modify Windows for devices with only 8GB of memory.

      European automakers source from the same suppliers and do not have a separate queue for components. Companies like Volkswagen, Stellantis, and BMW face the same pricing pressures for capacitors, boards, and memory in a market where electric vehicle prices have already stabilized.

      The policy implications are challenging. Europe has allocated its semiconductor funding towards leading-edge fabrication facilities, while the components crucial for keeping production lines running—passive components and automotive memory—have not been considered strategic in industrial policy.

      As a result, the least expensive components in a vehicle now dictate overall costs. This is a lesson the industry has learned twice in the last five years, yet it has not changed the approach to stockpiling materials.