How long will the global silicon chip shortage last? If you were to ask ten CEO’s of leading technology companies, you’d probably get ten different answers.
However, there’s one timeframe most CEO’s quote…
2023 is the date CEO’s are optimistic about
Intel’s CEO, Pat Gelsinger, has given us a realistic timeframe for the chip shortage to end – he says the chip shortage won’t end until 2023.
“We’re in the worst of it now; every quarter next year, we’ll get incrementally better, but we’re not going to have supply-demand balance until 2023,” Gelsinger told CNBC.
Gelsinger’s thoughts echo those of Glenn O’Donnell, a vice president research director at advisory firm Forrester, who says the chip shortage will last until 2022.
“Because demand will remain high and supply will remain constrained, we expect this shortage to last through 2022 and into 2023,” O’Donnell wrote in a blog in March.
Daimler chairman Ola Källenius also believes the chip shortage could last until 2023.
“Several chip suppliers have been referring to structural problems with demand,” Källenius told reporters during a roundtable event ahead of the Munich IAA car show. “This could influence 2022 and (the situation) may be more relaxed in 2023.”
What will chip demand look like in 2022-2023?
In July, the CEO of STMicroelectronics provided insight into what we can expect in 2022-2023, “Things will improve in 2022 gradually, but we will return to a normal situation … not before the first half of 2023,” he said in an interview.
The global silicon chip shortage has led to car plants shutting down, paused manufacturing lines and delayed product launches. It isn’t a short-term problem, and no one knows for sure when supply will start catching up with demand.
All industries and companies that use chips have been affected by the shortage – even Samsung, the world’s biggest computer-chip manufacturer, has been affected by it, delaying the launch of several Galaxy and Note smartphones.
Most experts agree that 2022 will echo 2021, with moderate-extreme shortages of integrated circuits and chips, as well as certain active and passive components. Prices are also expected to rise in line with raw material costs.
2023 may be the year that supply starts meeting demand, but it will require the mass opening of foundries and factories. Investment in new plants and manufacturing lines is ongoing, with new fabs set to open in the next two years.
In 2023, we hope to see regular chip inventory levels and average delays of about three months to replenish components. At the moment, some components have delays over a year, and inventory supplies for chips are running low.
Keeping supply chains moving
The best way to keep supply chains moving is to partner with an electronic components distributor like us. We can source chips from around the world, tapping into stockpiles and inventory that isn’t available to the average company.
If you are experiencing an electronic component shortage, we can help. Email us if you have any questions or call us on 1-973-579-8100 to chat with our team.