The global shortage of critical chip semiconductors is likely to last at least through next year and perhaps longer, US Commerce Secretary Gina Raimondo. Shutdowns of key Asian suppliers due to the Covid-19 pandemic crippled supplies last year, just when American consumers, flush with cash from government aid, went on a spending spree buying cars and electronics, which depend on the chips. [1]

Figure 1. Global Chip Shortage likely to Last through 2023

Figure 1 shows raimondo said she convened a dozen CEOs of chipmaking companies during her time in South Korea and they discussed ways to overcome the crisis. She sai, "and they all agreed that deep into 2023, possibly early '24 before we see any real relief."

Warning that we live on borrowed time, Raimondo urged Congress to approve funding to stimulate domestic manufacturing of the computer chips that are key to a wide array of products, from smartphones to medical equipment to vacuum cleaners. [2]

Affected industries include carmakers, healthcare providers and telecom operators. As a result of the difficulties in acquiring chips, Apple had to slash its production targets for the iPhone 13 by as many as 10 million units and carmakers including Ford, Jaguar Land Rover, Volkswagen, General Motors, Nissan, Daimler, BMW, Renault and Toyota were forced to shut factories, scale back production or exclude high-end features that relied on semiconductors, such as integrated satellite navigation systems.

“We are really on borrowed time,” Raimondo said. “Every other country has subsidies on the table now and if Congress doesn’t act very quickly,” she warned, key producers like Samsung, Intel and Micron “are going to build in another country and that be that would be hugely problematic.” [3]

References:

1. https://www.eletimes.com/global-chip-shortage-likely-to-last-through-2023
2. https://www.theweek.in/news/biz-tech/2022/06/01/global-chip-shortage-likely-to-last-through-2023--us-official.html
3. https://eandt.theiet.org/content/articles/2022/06/global-chip-shortage-will-run-deep-into-2023-say-us-officials/

Cite this article:

Thanusri swetha J (2022), Global Chip Shortage likely to Last through 2023, Anatechmaz, pp.157