It is anticipated that the global shortage of semiconductors may last up to another two years.  Yes you read that right, up to another TWO calendar years.

In January of this year, global semiconductor industry sales reached $40 billion, an increase of 13.2% over the same time in 2020.  Although chip manufacturers work overtime continue to produce semiconductors, the demand for devices that use them is reaching new heights and has already far outpaced the global supply.

The pandemic of the last 18 months has played a huge part in bringing this about.  As companies required their staff to work remotely, purchases of PC, Wireless Access points and other technology for home office use surged. Not surprisingly, people turned to new, chip-filled forms of entertainment to pass the time during weeks or months of lockdowns.  This ran the gambit from video game consoles to new DVRs to new televisions and even new smartphones.

The behavior of the Chinese government has not helped matters either.  There is evidence that Chinese technology companies have stockpiled chips and chip making equipment, especially when the Trump administration was still in power and implementing trade sanctions to balance trade between the United States and China.

“At some point, consumers will be affected by the chip crisis,” Ondrej Burkacky, McKinsey lead on semiconductors, told ZDNet. “The high noon season for consumer electronics are Q3 and Q4, and there might be shortages of several products during this time.”

PC manufacturers have suffered from significant supply chain issues for the last several months. Although record sales were reported in 2020, it is estimated that those numbers could have been higher had components been available.

Businesses are expected to be impacted significantly more than consumers, since they buy technology at a much larger scale.  Companies do not simply buy a single PC, but often hundreds or even thousands at a time. Additionally networking products such as datacenter core switching, edge switching and wireless access points shipments are being delayed by weeks and months from leading networking manufacturers such as Extreme Networks, HPE/Aruba, Cisco and Juniper.


Chip shortage

The global chip shortage is also impacting consumer electronics such as refrigerators, ovens, washing machines, dryers and more.  Even toys and common appliances such as lights, electronic soap dispensers, vacuum sealers and stereo gear are going to experience the impact.

The trickle down from all of this is affecting other areas such as homebuilders and contractors staying on schedule building homes, the buyers of those homes being able to close on time and locking in their interest rates.

The automotive industry is also being impacted.  Used car values have skyrocketed as new car dealers struggle to keep their manufacturing on pace to expected norms.  Manufacturers have had to idle entire plant facilities because of the shortage of core silicone chips for the vehicles electronic components.   The idling of these plants in turn impacts suppliers of steel and other commodities to those plants.

It is estimated by industry analysts such as Forrester that the shortage and resulting supply chain impacts could last for another couple of years.

Leading chip manufacturers such as Intel have had existing manufacturing plants working overtime, along with building new facilities to attempt to keep up with the demand.  However building the new plants will of course take time, factoring into the two year shortage forecasts.  Consumers used to near instant gratification with shopping online and in stores are in for some disappointment in the coming months, as shortages are expected to last through next year.

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