Toshiba predicts the Semiconductor crisis to get Worse following the invasion of Ukraine

Supply issues for electronic components are unlikely to go away for another year, according to Toshiba Corp, as chronic shortages persist, and Russia’s invasion of Ukraine, a key supplier of chip-making materials, could also have an influence.

Hiroyuki Sato, the head of Toshiba’s devices unit, said in an interview: “The sense of shortages hasn’t changed at all. We expect the current tight supply will last until March next year.”

Ukraine is a key producer of purified rare gases like neon and krypton, which are both required for semiconductor production. According to TrendForce data, it produces about 70% of the world’s neon gas. While some chipmakers have minimised the impact of the war on their businesses, Sato believes it is “obviously not positive.”

Toshiba’s devices division makes unglamorous but essential computer components like power-control chips. Sato said the situation and outlook had not improved since the business issued a supply warning in September.

Prices are also likely to keep increasing, he said. “It’s been a year since prices of various inputs such as metals began rising, and we still can’t foresee when that trend will reverse. We had to, and will need to, ask our customers to share the burden because no single company can absorb the whole impact anymore.”

Sharp Corp stated last month that it is keeping a close eye on costs before settling on prices for its new gadgets. I-O Data Device Inc said it will hike prices on its network-attached storage products soon, after raising prices on its LCD monitors last year.

Toshiba announced this month that it will accelerate investment to grow its semiconductor output to fiscal 2022 from the first half of fiscal 2023. However, Sato stated that this would not be enough to eliminate the chip scarcity, and the corporation may boost its capital spending pace if necessary.

The Tokyo-based firm has had a tumultuous year. Activist investors have slammed the company’s intention to split into two businesses to unlock value. Sato claims that the move will allow his company to be more agile and less reliant on approvals from higher up the corporate ladder.

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