The semiconductor chip shortage captured the world’s attention early on during the pandemic as the first clear sign that the measures undertaken during the pandemic were creating significant supply-chain disruptions.
These disruptions have since expanded to include many other industries and have caused inflation to skyrocket in countries around the world. And while there are signs that supply-chain stresses are easing and the chip shortage is abating, in what follows we discuss the risks and uncertainties associated with the semiconductor chip industry and what to expect next.
Lead times and prices for memory applications should stabilize, but prices and lead times could rise for discrete and analog applications if production pressures continue.
- For the first time since the start of the pandemic the aggregate semiconductor chip lead time fell last month, though ever so slightly.
- At the core of the chip shortage is the fact that most of the world’s advanced chips are manufactured in Taiwan and South Korea, and there are significant entry costs to penetrate this market.
- While we see lead times remaining elevated through the end of the year, we expect the chip shortage to normalize sometime in 2023.