Major Tech Companies Warn That Global Chip Shortage May Last a Few Years

A global shortage of computer chips has led to price hikes and delays to the supply of electronic goods like mobile phones, cars and game consoles, and major tech companies say it will be years before things normalize.

On Monday, chipmaker Nvidia gave a conservative estimate of when the shortage will abate during a call with investors.

“Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean,” Nvidia’s chief financial officer and executive vice president Colette Kress said. “We expect demand to continue to exceed supply for much of this year.”

Still, Kress said that the company expects to have sufficient supply of its graphic processing units and chips, which are used in gaming, cars and for robotics, beyond the first quarter of 2022.

Other tech executives are less optimistic.

On Tuesday, Intel CEO Pat Gelsinger told The Washington Post that the current chip shortage is likely to last “a couple of years.” He said that while semiconductor companies have been able to come up with short-term solutions, like boosting production, the damage will still take years to undo.

“It just takes a couple of years to build capacity,” he told The Post. 

Taiwan Semiconductor Manufacturing Co. (TSMC), which produces processors for Apple, Qualcomm and other major companies, believes that the shortage could last into next year. CEO C. C. Wei said during an online earnings briefing on Thursday that the company is branching out to produce new supply.

“We have acquired land and equipment, and started the construction of new facilities,” Wei said. “We are hiring thousands of employees and expanding our capacity at multiple sites.”

The chip shortage has made it difficult to buy the PlayStation 5, Xbox Series X, and other recently released gaming systems. In February, Sony blamed the chip shortage for the limited supply of its new console.

Supplies likely became even tighter last month after a large shipping container became lodged in the Suez Canal, causing disruptions to shipping routes that pass through the popular waterway.
Source: Read Full Article