As we enter into a new decade in 2021, it is safe to say we are more dependent on semiconductor chips more than ever. However, after the pandemic and lockdowns, the world has faced one of the worst situations regarding chip availability.
From chip manufacturers to designers, from gamers to car manufacturers, everyone is going through this insane chip shortage that has persisted since the end of 2020.
While it was predicted that it would finally eradicate by 2021, a lot of industry experts have confirmed that chip shortage will exist until 2022, including Gartner:
“The semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021. Foundries are increasing wafer prices, and in turn, chip companies are increasing device prices,” said Kanishka Chauhan, principal research analyst at Gartner.
The crisis initially started with devices such as power management, display devices and microcontrollers, fabricated on legacy nodes at 8-inch foundry fabs, which have a limited supply.
However, that has extended to other devices, and there are capacity constraints and shortages for substrates, wire bonding, passives, materials and testing, all of which are parts of the supply chain beyond chip fabs.
“Since the current chip shortage is a dynamic situation, it is essential to understand how it changes on a continuous basis. Tracking leading indicators, such as capital investments, inventory index and semiconductor industry revenue growth projections as an early indicator of inventory situations, can help organizations stay updated on the issue and see how the overall industry is growing,” said Gaurav Gupta, research VP at Gartner.
Across all categories, this chip shortage will make devices unavailable until the second quarter of 2022, whereas, the substrate capacity constraints could potentially extend to the fourth quarter of 2022, according to Gartner.