ABB electrification hit by chip shortage

October 22, 2021 // By Nick Flaherty
ABB electrification hit by chip shortage
ABB is warning of challenges for its electrification business as a result of the chip shortage.

“Q3 painted a mixed picture, containing on one hand a high level of demand driving strong order growth, while on the other hand the tight supply chain impacted our revenues more than anticipated,” said Björn Rosengren, CEO of ABB.

He said ABB anticipates a continued tight supply chain to impact customer deliveries through the rest of this year, which will hit revenue growth for the full year of 6 to 8 percent, down from just below 10 percent.

Orders increased by 29 per cent overall year-on-year, but the electrification business only saw 7 percent growth, and there is the risk of over-ordering by customers.

“We make conscious efforts to screen that orders we accept are backed up by real demand, but in the current environment of a strained supply chain it is only fair to assume it includes a certain element of customers putting through safety-orders to secure future deliveries,” said Rosengren

Underlying customer activity increased somewhat in the Americas, declined in Europe and remained stable in China.

“Revenues were hampered by supply chain constraints delaying customer deliveries. This was primarily related to semiconductors and imbalances in the overall supply chain, with the impact most tangible in Electrification and Robotics & Discrete Automation,” he said.

However earnings (EBITA) increased by 35 percent year on year, “This improvement however benefited from the adverse temporary items in last year’s results, good development in most business areas and unusually low corporate costs in the current quarter.”

The company is divesting a large business, following the separation of the grid business into Hitachi Energy. The divestment of the Mechanical Power Transmission division (Dodge) for $2.9bn in cash and expects completion of the deal before the end of this year.

At the same time, the Robotics and Discrete Automation division acquired ASTI Mobile Robotics Group (ASTI), a leading global autonomous mobile robot (AMR) manufacturer. “This deal will support us in capturing the potential in areas such as logistics and warehouse automation. We are also making good progress with the other portfolio activities,” he said.

He points to the launch of the Terra 360 as the only charger in the market designed to simultaneously charge up to four vehicles with dynamic power distribution. It has a maximum output of 360 kW and is capable of fully charging any electric car in 15 minutes or less. “This will further cement our leading position in the EV-charging space,” he said.

On a similar topic but with focus on the mining industry, Process Automation launched the ABB Ability eMine comprising a portfolio of technologies facilitating the all-electric mine, including monitoring and optimizing energy usage. From 2022, it will also include ABB Ability eMine FastCharge which provides high-power electric charging for haul trucks. It also incorporates the ABB Ability eMine Trolley System which can reduce diesel consumption by up to 90 percent.

www.abb.com

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