Qualcomm's CEO says the chip shortage was going to happen, even without COVID

Qualcomm says the chip shortage is coming to an end.
Chris Young

Qualcomm president and CEO Cristian Amon believes the global chip shortage would have occurred, even if the Covid-19 pandemic had never hit.

In a keynote speech at the Mobile World Congress in Barcelona, Amon explained that the industry was already heading for a supply crunch caused by sharply increased demand for consumer electronics, automotive parts, and "many other things that you wouldn't realize have semiconductors in" them.

At the MWC, the CEO welcomed new initiatives within Europe and the U.S. to help ease the chip shortage. He cited the European Chips Act, an €11 billion program announced by the European Commission last month, as well as the Chips for America initiative in the U.S.

By working together, Amon believes the U.S. and Europe can achieve their goal of having half of all chip production come from these two regions of the world. He also noted that Qualcomm is still currently affected by the semiconductor shortage, and the company is seeing "more demand than supply." However, he expects the situation to improve in the second half of the year. Back in December, the CEO said that he expected the shortage to end this year.

Avoiding future semiconductor shortages

Amon said these recent issues show the immense importance of computing in our everyday lives today. These recent issues are "a testimony [to] how important and essential semiconductors have become for the future of economies in every country and across every industry," he explained.  The chip shortage has "brought a new sense of awareness into focus of the need to build a resilient, geographically-diversified supply chain".

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Amon did also warn that there is a "need to invest in much larger capacity for manufacturers of semiconductors" if the world is to avoid massive semiconductor supply shortages in the future, as demand continues to increase across industries.

One industry in which semiconductor demand continues to boom is the automotive industry, and it is increasing about 17 percent per year, according to a Rolan Berger report. In his keynote, the Qualcomm CEO spoke of the company's forays into the automotive industry, saying they are "working with all leading automakers" and that "the car is becoming a connected computer on wheels." He also announced enhancements to the company's connectivity-as-a-service Snapdragon technology for its "digital chassis" for self-driving cars, including global connectivity support and integrated analytics. These advances will, no doubt, require even more semiconductor output, adding to the already massive demand.

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