The global chip shortage could last until 2023
The Infineon logo can be seen on a chip on the circuit board of a microcontroller kit at the Infineon general meeting in the congress center of the Munich exhibition center. Infineon is one of the most important European technology companies in the semiconductor sector.
Matthias Balk | Image Alliance | Getty Images
According to analysts monitoring the industry, there will be a shortage of semiconductors for some time to come.
These days, chips are found in everything from PlayStation 5s and toothbrushes to washing machines and alarm clocks. But there isn’t enough to get around – it is a multi-faceted subject that is showing no sign of easing and has led some to refer to the current crisis as “Chipageddon”.
Glenn O’Donnell, vice president research director at consulting firm Forrester, believes the shortage could last through 2023.
“With demand high and supply limited, we expect this shortage to continue through 2022 and 2023,” he wrote on a blog.
O’Donnell believes that demand for personal computers containing some of the most advanced chips will “wane” over the coming year, but “not by much”.
In the meantime, he expects data centers that are full of computer servers to buy more chips in the next year after what he calls “grim 2020”.
“Couple that with an unstoppable desire to instrument it all, along with the continued growth in cloud computing and cryptocurrency mining, and we see nothing but boom in chip demand,” said O’Donell.
Meanwhile, Patrick Armstrong, CIO of Plurimi Investment Managers, told CNBC’s Street Signs Europe last week that he expected the chip shortage to last for 18 months. “It’s not just cars. It’s phones. It’s the internet of everything. There are so many merchandise now that have a lot more chips than ever before,” he said. “They are all internet-enabled.”
The auto industry is affected by the global chip shortage more than any other sector.
The world’s largest chip maker, TSMC (Taiwan Semiconductor Manufacturing Company), announced earlier this month that it believes it could catch up with automotive demand by June. Armstrong thinks this is ambitious, however.
“If you hear Ford, BMW and Volkswagen all have pointed out that there are capacity constraints and they can’t get the chips they need to make the new cars,” he said.
Elsewhere, Gartner said on Wednesday that the shortage would last until 2021, adding that the shortage affects all chip types and that chip prices are rising.
Gartner analyst Alan Priestley told CNBC on Thursday that the situation could improve for some sectors over the next six months, but that there could be a “nudge” by 2022.
“It shouldn’t take longer,” he said. “The industry is building up more capacity, but it takes time.”
Intel announced in March that it plans to spend $ 20 billion on two new chip factories in Arizona. Intel has also announced that it will build a plant in Europe if it receives public funding.
“This stuff will be two or three years before we see this,” Priestley said. “But that’s really aimed at meeting future demand.”
The CEO of the German chip manufacturer Infineon said last Tuesday that the semiconductor industry was breaking new ground.
Reinhard Ploss told CNBC’s Street Signs Europe last week that it was “very clear that it will take some time” for supply and demand to regain balance.
“I think two years is too long, but we will definitely see that it will last until 2022,” he said. “I think that additional capacities will come … I expect a more balanced situation for the next calendar year.”
Wenzhe Zhao, director of global economics and strategy at Credit Suisse, said in a statement last Wednesday that recent chip shortages have encouraged stockpiling along chip production chains and widened the gap between growing demand and stagnating supply.
Zhao said that new semiconductor manufacturing capabilities won’t go online until 2022 or later, adding that aside from adjusting order books, production schedules and prices, little can be done to address today’s shortage.