SHOPSMART AUTOS – CUSTOMER INFORMATION – DECEMBER 10, 2021-3
Chip shortage will last ‘well into 2022’and the impact will go beyond cars
So while we’re hearing a lot about it, part of the challenge for auto is it’s a small part of a very big industry. So that is starting to shift. But the other end markets are growing as well. So while auto is growing as we put more semis in each car, move more electric vehicles, more autonomous driving, it is growing. But so is semi use in industrials, so is semi use, just our data centers are growing. So everything is growing. So I’m not sure their overall mix will change as much as just the demand is going up across the board. – And lastly, I mean, when we look at the issue, right, in supply and demand pricing power, and I guess who’s best positioned here is pretty important. We talk so much about why there should have been a boost in some of these stocks. But I mean, you look at the space as a whole, you see who is best positioned to kind of– I don’t want to say squeeze to their benefit here the issues in this space. But who looks best poised here in the upside of solving this? ANNE HOECKER: Yeah. Well, the one thing that is unique about the semiconductor supply chain is it is very complex and disaggregated. So there’s different components up and down the supply chain. Obviously, TSMC, which we just spoke about, has recently announced some price increases. They’ve also announced very big increases in the capital they’re going to spend, so both costs that they’re going to incur, but also passing that through in terms of prices. But even if you go back in the value chain, the semiconductor capital equipment players, it’s typically a very cyclical industry seeing huge demand right now as everyone’s trying to build out this capacity. So up and down the value chain, I think there are different players who are all positioned to try to have good upside as we grow the overall capacity for semiconductors. And then at the end, it should be the consumers that benefit in the long run, as we just get more technology out there in all of the different industries. – Anne Hoecker, Partner and Head of America’s Technology Practice at Bain & Company, fascinating report. It was great to talk to you today.
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