- Chips may be found in a wide range of products, from PlayStation 5s to toothbrushes, washing machines, and alarm clocks. But there isn’t enough to go around – it’s a complicated problem that isn’t going away anytime soon.
- According to Glenn O’Donnell, vice president and research director at Forrester, the shortfall might persist until 2023.
- The semiconductor business, according to the CEO of German chipmaker Infineon, is in uncharted terrain.
Semiconductors will continue to be in limited supply for some time, according to industry analysts.
Chips may now be found in a wide range of products, from PlayStation 5s and toothbrushes to washing machines and alarm clocks. But there isn’t enough to go around – it’s a multidimensional problem that isn’t going away, prompting some to dub the present predicament “Carmageddon.”
According to Glenn O’Donnell, vice president and research director at Forrester, the shortfall might persist until 2023.
“We expect this shortfall to persist through 2022 and into 2023 since demand will remain strong and supply will remain constrained,” he said in a blog.
In the following year, O’Donnell anticipates demand for PCs, which include some of the most sophisticated processors, will “soften a little,” but “not a lot.”
Meanwhile, after a “dismal 2020,” he expects data centers, which are brimming with computer servers, to acquire more chips in the coming year.
“When you combine that with people’s insatiable drive to instrument everything, as well as ongoing development in cloud computing and cryptocurrency mining, we see nothing but boom times ahead for chip demand,” O’Donnell added.
Meanwhile, Plurimi Investment Managers’ CIO Patrick Armstrong said last week on CNBC’s “Street Signs Europe” that he believes the chip scarcity would last 18 months. “It isn’t simply automobiles. It’s a phone call. It’s a one-stop shop for anything on the internet. He stated, “There are so many things now that have far more chips than they had in the past.” “They’re all connected to the internet.”
The worldwide chip scarcity has had the greatest impact on the automotive industry.
TSMC (Taiwan Semiconductor Manufacturing Company), the world’s largest chipmaker, announced earlier this month that it expects to be ready to meet car demand by June. Armstrong, on the other hand, thinks that’s a bit ambitious.
“If you listen to Ford, BMW, and Volkswagen, they all say there are capacity bottlenecks and that they can’t obtain the chips they need to build new cars,” he added.
In other news, Gartner predicted on Wednesday that the chip scarcity will last until 2021, adding that it will affect all chip types and that chip prices will rise.
According to Gartner analyst Alan Priestley, the situation in certain industries may improve in the next six months, but there may be a “knock-on impact” until 2022.
He stated, “It shouldn’t go any longer.” “The industry is increasing capacity, but this will take time.”
In March, Intel revealed plans to invest $20 billion in two new semiconductor facilities in Arizona. Intel has also stated that if it receives government financing, it may establish a factory in Europe.
“That stuff will take two or three years before we see it,” Priestley said. “However, that is mostly aimed at meeting future demand.”
Meanwhile, Infineon’s CEO warned on Tuesday that the semiconductor industry is in “uncharted terrain.”
Last week, Reinhard Ploss told CNBC’s “Street Signs Europe” that supply and demand will “clearly take time” to rebalance.
“I believe two years is excessive, but we will most likely see it extended until 2022,” he added. “I believe more capacity will be added… In the coming calendar year, I anticipate a more balanced situation.”
The current chip shortages, according to Wenzhe Zhao, director of global economics and strategy at Credit Suisse, have promoted inventory hoarding along chip manufacturing chains, increasing the gap between rising demand and static supply.
Zhao stated that the additional semiconductor manufacturing capacity will not be operational until 2022 or later, and that there is nothing that can be done to alleviate the current shortfall other than changing order books, production schedules, and prices.
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