By Sudipta Choudhury - June 11, 2021 3 Mins Read
As the semiconductor chip shortage is a dynamic situation globally, it is crucial to for business leaders to understand how it changes on a continuous basis.
The global semiconductor shortage will persist throughout 2021, and is anticipated to the normal levels by the 2Q of 2022, reveals Gartner. This shortage will rigorously disrupt the supply chain ecosystem and will constrain the production of several electronic types of equipment in 2021.
The foundries are raising wafer prices, and in turn, chip-makers are increasing the device prices. The chip shortage began primarily with devices, including power management, display devices, and microcontrollers – fabricated upon legacy nodes at 8-inch foundry fabs and it has a limited supply.
The deficiency has now extended to various devices, and there are capacity constraints as well as shortages for substrates, passives, wire bonding, materials, and testing. These all are a part of the supply chain, beyond the chip fabs.
In fact, these are highly commoditized sectors with minimal flexibility or capacity to invest aggressively over short notice. Spanning most categories, device shortages are forecasted to be pushed out until the second quarter of 2022.
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However, the substrate capacity constraints could potentially expand until the fourth quarter of 2022. As a result, Gartner recommends that OEMs dependent on semiconductors need to take key actions to mitigate risk and revenue loss amid the global chip shortage:
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As explained by Gaurav Gupta, research vice president at Gartner in the company blog post – “Since the current chip shortage is a dynamic situation, it is essential to understand how it changes on a continuous basis.”
He also said, “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.”
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