The Surging Demand for Chips is Creating Problems Across Industries
Current widespread chip shortages have caused semiconductor prices to rise, orders to be delayed and production to be stunted for numerous industries, with no end in sight. As a result, companiesare struggling to obtain needed product as demand for cloud-computing, consumer electronics, data centers, 5G and automobiles continue to rise.
Elsie Neoh, Fusion Worldwide's Global IC Commodity Manager, shared withThe Wall Street Journal, "lead times across the industry have risen to six months, from eight to 10 weeks during the pandemic", causing major disruptions in global supply chains. The chip constraint, which is expected to last through the end 2022, has been hindered by shortages in other components.
Because these components are so limited, consumers may experience delays in getting new devices, like laptops and smartphones, as well as new cars. Chipmakers have tried to combat their shortage issues by investing in production lines that produce more modern chips buthaven't been able to keep pace with capacity increases.
As a result, both industries are competing for every bit of limited manufacturing capacity to meet growing demand.TSMC, for instance, is running at about 90% of capacity for its most advanced chips.
The automotive sector, especially, has been hit hard as it attempts to recover from its recent slump.Toyota expects supply shortages could continue through the spring, and automotive manufacturers like Ford and GM are idling production.
The surge in demand is expected to boost sales for contract chipmakers that account for a major share of the world’s semiconductors. Sales alone are expected to grow a record high of 6% this year, according to Taipei-based analysis firm TrendForce.