Get Used to Chip Shortages: They Are Not Going Away Anytime Soon
There's no denying that there is a global chip shortage. Last month, we reported how Japan had committed $5.2 billion (roughly 600 billion yen) toward providing support for semiconductor manufacturers in a bid to help solve the world's ongoing chip shortage.
But is that enough? It seems not. During a recent earnings call, Micron CEO, Sanjay Mehrotra, told investors that it is clearly not.
“Across the PC industry, demand for DDR5 products is significantly exceeding supply due to non-memory component shortages impacting memory suppliers’ ability to build DDR5 modules. We expect these shortages to moderate through 2022, enabling bit shipments of DDR5 to grow to meaningful levels in the second half of calendar 2022," said the CEO.
What does this mean for consumers? Cars are more expensive, computer makers are struggling to keep up with consumer demand, and many products have been severely delayed such as PlayStation 5 which is still impossible to order a year after its launch, according to Yahoo Finance.
COVID is partially to blame. Carmakers assumed people would not want to buy cars during the pandemic and slowed down production only to discover the opposite was true. COVID also forced the slowdown of many production lines such as those of chipmakers.
Companies are trying to do something about the crisis. Intel, TSMC, and Samsung are investing in new factories but it will still take at least two years until they are up and running.
Experts are estimating that the shortage will continue well into 2022 and 2023. Intel CEO Pat Gelsinger stated that he expects the situation to continue till 2023. "COVID disrupted the supply chains, causing it to go negative. Demand exploded to 20 percent year-over-year and disrupted supply chains created a very large gap and that exploding demand has persisted," he said to Nikkei.
Why do we do it, how can we stop it, and who else is at it?