By Nathalie Voit
Major chip manufacturing companies both abroad and at home expect the semiconductor shortage to persist well into 2022 or beyond.
An array of industries, from automakers to consumer electronics firms, are dealing with a global chip shortage that executives say could persist through at least 2022. The worldwide chip shortage, prompted by pandemic-induced supply and labor pressures, has taken a toll on companies producing everything from game consoles to electric cars. The supply problems have been worsened by strong consumer demand as the COVID-19 pandemic prompted a massive boom in electronics sales.
“What we’re seeing from our licensees is that they could all be selling more, if only…there was more capacity to go around. Everyone is seeing huge demand,” said Arm Chief Executive Simon Segars on Oct. 18 at the Wall Street Journal Tech Live conference.
Pat Gelsinger, CEO of Intel Corp., the largest semiconductor chip manufacturer in the world, also expects the shortage to stretch into 2023, warning that chip supply disruptions could get worse before they get better.
“We have a long way to go yet. It just takes a long time to build [manufacturing] capacity,” Gelsinger said.
The mismatch of supply and demand in the semiconductor industry has made production particularly difficult for chipmakers.
Along with Taiwan Semiconductor Manufacturing Co., the world’s leading contract chip maker, Intel is developing new facilities to step up the production capacity of processors. However, it will take at least two years before some chip manufacturing plants can produce the parts.
“There is no quick fix,” Segars said. He expects the supply situation to ease in about a year despite overall growing demand.
“There’ll be some oversupply at some point in the future,” with costs falling, he said. However, as the economy advances towards more automation, Segars thinks demand will persist in the long run.
“The move towards autonomy—more and more mobile devices, more and more sensors everywhere, which are really going to be a really important thing—it’s driving demand in ways that we’ve just never seen before,” he said.
Auto executives across the world are also voicing their concerns. “Without a doubt, this shortage is going to go well into 2022, at least the second half of ‘22,” said senior Volkswagen executive Scott Keogh at the Reuters Events Automotive Summit on Oct. 19.
The shortage is so bad Italian luxury vehicle manufacturer Maserati had to roll back the official debut of the Maserati Grecale, initially set to be unveiled Nov. 16.
The company’s latest announcement blamed the delay on “problems that have caused interruptions in the supply chains for the key components necessary to complete the car’s production process. In particular, due to the shortage of semiconductors, the quantity of production would not allow us to respond properly to the expected global demand.”