Global chip shortage expected to persist until second quarter of 2022: Gartner

STAMFORD: The worldwide semiconductor shortage will persist by 2021, and is expected to get well to regular ranges by the second quarter of 2022, in accordance to Gartner, Inc.

“The semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021. Foundries are increasing wafer prices, and in turn, chip companies are increasing device prices,” mentioned Kanishka Chauhan, principal analysis analyst at Gartner, in an announcement.

The chip shortage began primarily with gadgets, reminiscent of energy administration, show gadgets and microcontrollers, fabricated on legacy nodes at 8-inch foundry fabs, which have a restricted provide. The shortage has now prolonged to different gadgets, and there are capacity constraints and shortages for substrates, wire bonding, passives, supplies, and testing, all of that are components of the provision chain past chip fabs. These are extremely commoditized industries with minimal flexibility/capability to make investments aggressively on a brief discover.

Across most classes, machine shortages are expected to be pushed out until the second quarter of 2022, whereas substrate capability constraints may doubtlessly prolong to fourth quarter of 2022.

Gartner Index of Inventory Semiconductor Supply Chain Tracking – Projected Worldwide Semiconductor Inventory Index Movement, 2021-2022.

Gartner analysts advocate that OEMs dependent straight or not directly on semiconductors take 4 key actions to mitigate threat and income loss in the course of the global chip shortage:

  • Extend provide chain visibility: The chip shortage makes it important for provide chain leaders to prolong the provision chain visibility past the provider to the silicon degree, which can be important in projecting provide constraints and bottlenecks and ultimately, projecting when the disaster scenario will enhance.
  • Guarantee provide with companion mannequin and/or preinvestments: OEMs with smaller and significant part necessities should look to associate with related entities and strategy chip foundries and/or OSAT gamers as a mixed entity to achieve some leverage. Additionally, if scale permits, preinvesting in a commoditized half of the chip provide chain and/or foundries, may assure the corporate a long-term provide.
  • Track main indicators: While no related parameter by itself will undertaking how the shortage scenario will evolve, a mixture of related parameters can assist information organizations in the suitable path. “Since the current chip shortage is a dynamic situation, it is essential to understand how it changes on a continuous basis. Tracking leading indicators, such as capital investments, inventory index and semiconductor industry revenue growth projections as an early indicator of inventory situations, can help organizations stay updated on the issue and see how the overall industry is growing,” mentioned Gaurav Gupta, analysis vp at Gartner, in an announcement.
  • Diversify provider base: Qualifying a special supply of chips and/or OSAT associate would require further work and funding, however it could go a good distance in lowering threat. Additionally, creating strategic and tight relationships with distributors, resellers and merchants can assist with discovering the small quantity for pressing parts.
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