SHOPSMART AUTOS – CUSTOMER INFORMATION – DECEMBER 18, 2021 -1
Semiconductor chip shortage could extend through 2022
The semiconductor chip shortage that is hamstringing the production of products ranging from cars and computers to appliances and toothbrushes will extend into 2022 and potentially beyond that, the CEO of semiconductor company Marvell Technology said. “Right now, every single end market for semiconductors is up simultaneously; I’ve been in this industry 27 years, I’ve never seen that happen,” said Marvell CEO Matt Murphy during a CNBC Technology Executive Council event on Thursday. “If it stays business as usual, and everything’s up and to the right, this is going to be a very painful period, including in 2022 for the duration of the year.” While several chip producers have announced plans to expand factory capacity, Murphy, who noted his firm is fabless and works with contract manufacturers on its designs, said “that’s not going to kick in until 2023 and 2024 — so there’s this painful period.” That is a more pessimistic view than some of Murphy’s chip industry peers, who have recently said they expect the shortage to wane next year as new factories open. “We’ve always gone through cycles of ups and downs, where demand has exceeded supply or vice versa,” AMD CEO Lisa Su said Monday at the Code Conference in Beverly Hills, California. “This time, it’s different.” Su said that while she expects the first half of 2022 to be “likely tight,” the second half will be less severe as manufacturing capacity opens. “It might take, you know, 18 to 24 months to put on a new plant, and in some cases even longer than that,” Su said. “These investments were started perhaps a year ago.” AMD rival Intel is one of the companies that has looked to double down on manufacturing, announcing in March that it would invest $20 billion in two new chip factories in Arizona. TSMC, which is the biggest manufacturer of semiconductors on contract and works with companies including Marvell, is also building a $12 billion factory in Arizona. The company announced in April that it would invest $100 billion over the next three years to increase factory capacity. “I think there’s no way, from my point of view, that every segment of the electronics industry stays up and to the right, ripping demand for another 12 months; it doesn’t make any sense,” Murphy said. “I think something’s got to give. And when it gives that should free up the capacity in aggregate for the rest of the industry to go consume and ultimately align it with the true demand.”
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