Smartphones Could Be Next In Global Chip Shortage
According to industry experts, the global chip shortage that has hit the auto industry so hard could spread through 2022 and affect smartphone manufacturing afterwards. The underlying effect could be a lower supply for a wider variety of household appliances and industrial equipment.
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Smartphone chips will be rare
Iris Pang, chief economist of ING Greater China, told Reuters that the auto industry could see an improvement in chip supply, “with China meeting production demand that Taiwan could not meet.”
Taiwanese semiconductor companies have increased their production quota in neighboring China. The cause is the inconsistent production of factories and port logistics, amid COVID-19 restrictions.
Pang told Reuters that smartphone makers would be the next to feel the semiconductor shortage. “China gained 5% on the chip shortage in terms of GDP – Taiwanese semiconductor companies have planned well and built large factories in mainland China.”
Shipments of new models of smartphones could be affected, as “Taiwanese semiconductor companies are adapting the manufacturing of chips for automobiles, so the chip shortage is expected to be resolved for automobiles in a few weeks, but the problem of shortage of chips from other electronic devices persists “.
The bottleneck in the supply chain could last until the second quarter of next year, according to Adam Khan, founder of AKHAN Semiconductor.
Automotive industry, pick up
Some of the industry’s largest semiconductor manufacturers are already reacting to the comeback. ASML Holding NV (NASDAQ: ASML) raised its sales expectations based on increased chip orders, while Taiwan Semiconductor Mfg Co Ltd (NYSE: TSM) and Intel Corporation (NASDAQ: INTC) also started to increase their production.
“Higher demand for chips, fueled by one-off purchases to meet work-from-home needs and continued demand for smartphones and other electronics, is expected to drive investment and growth in the industry. “
Andrew Feldman, CEO of chip startup Cerebras Systems, coincides with Khan in saying suppliers are working on 32-week lead times for new chips and components.
Iris Pang says even cryptocurrency miners are being forced to reuse chips, signaling how far from over the shortage of new materials is.
According to Dan Hutcheson, CEO of chip-focused VLSI Research, the semiconductor industry could grow 21% to 25% in 2021, “with electronics having its best performance since 2010,” as he told Reuters.