The global semiconductor chip shortage is expected to hit smartphone industry next. The same shortage, though, could end relatively soon in the automotive sector.
Industry executives and economists had predicted the semiconductor shortage in the automotive sector to last well into 2022. The situation, however, is helped by China taking up some production demand that Taiwan could not meet, ING Greater China chief economist Iris Pang told Reuters Global Markets Forum this week.
Taiwanese semiconductor companies contributed a lot during the chip crisis this pandemic. The companies helped in boosting production in China as blackouts and mandatory social distancing measures halted factory output and port operations in Taiwan, Pang said.
“China gained 5% on the chip shortage in terms of GDP – Taiwan semiconductor companies have planned well and built large factories in mainland China,” Pang continued. Along with the statement, Pang voiced her concern over the possibility of disruptions in smartphone industry.
“Taiwanese semiconductor companies are tailoring making chips for autos, so the chip shortage should be solved for autos in a few weeks, but other electronics’ chip shortage problem persists,” Pang added. According to Pang, his could affect the shipments of some new model smartphones in the future.
Companies across industries around the world have also gave out warnings on the ongoing problem to source chips.
ING’s Pang said even crypto miners are seeking ways to recycle “used” chips, which implies the shortage wasn’t going away.
Higher demand for chips, fuelled by one-off purchases to meet work-from-home needs and continuous demand for smartphones and other electronics, is expected to spur investment and growth in the sector.
Additionally, the chip shortage in the smartphone industry could possibly hurt supply for a range of appliances and industrial equipment.
Chip industry: future outlook
Sales outlook for one of the worlds biggest supplier to semiconductor makers, ASML, soared this week. A rally from chip giants, such as TSMC and Intel’s, to boost output is suspected to have boosted orders.
Founder of AKHAN semiconductor, Adam Khan, predicts that the broader supply crunch might continue until the second quarter of 2022. Khan, however, further noted that this timeline was “aspirational,” Reuters quotes.
The statement is supported by the CEO of chip startup Cerebras Systems, Andrew Feldan. Feldan agreed that vendors were quoting lead times as long as 32 weeks for new chips and components.
The chips industry could grow between 21% to 25% in 2021, with “electronics having its best showing since 2010,” said Dan Hutcheson, CEO of chips-focused VLSI Research.
So far this year, the Philadelphia SE Semiconductor index has outpaced the tech-heavy Nasdaq Composite with gains of over 16% versus 13%.
Read also: Samsung: Strong Chip Prices Likely Boost Q2 Profit
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