Chip Shortage Continues To Haunt Manufacturers

According to a report from Asia, the global situation around the availability of chips is easing somewhat these days, but the capacities of the chip manufacturers should still be fully utilized for the whole of next year. At the same time, chip prices continue to rise.

As the Taiwanese industry service DigiTimes reports, many middlemen for semiconductor products have begun to sell their inventories accumulated in recent months in larger quantities, which should indicate that the recent record level of demand has now eased somewhat.

Overall, however, demand still exceeds supply, it said. There would continue to be massive bottlenecks, especially in power management ICs, chips for the automotive sector, and network chips. The main problem is that the pandemic situation is currently changing dynamically worldwide, also because new variants of the coronavirus can have different effects in different countries.

Production at new plants from 2023

In addition, various chip manufacturers and other companies have announced the construction of new or at least the expansion of existing production capacities, but in most cases, the new production options will not be available until 2023. According to the sources from the industry, the demand for various chip products is now shifting cyclically.

It is assumed that the demand for Chromebooks fell in the third quarter of 2021, but the gap that this created was quickly filled by more demand from the commercial notebook sector. At the same time, the advancing 5G expansion, new AI applications, and the area of ​​high-performance computing would, in turn, generate more demand. Innovations in smartphones and electric vehicles also continue to ensure that there is greater demand for power management and network chips.

For the large contract manufacturers of semiconductor products, above all the Taiwanese manufacturer TSMC, this means that they have good prospects for strong growth and consistently high demand for the next two to three years, which gives them the security of tackling an expansion of their capacities to take. The prices for semiconductor products would therefore continue to rise in the coming months and years because capacities are limited and the costs for raw materials of all kinds continue to rise, according to the forecast.