reply Global chip shortage could last until 2023

According to the Wall Street Journal website on October 28, the global chip shortage has been going on for nearly a year, and the problem is getting worse for many customers. As delays get longer, sales are falling.Manuel Schoenfeld placed an order in May to buy transmission chips for electricity-monitoring devices made by his New York-based company, PowerX. He was told the chips would arrive in the summer, then in the fall, then again in the winter, and now doesn't expect to receive them until May 2022. "This is far from over," Schoenfeld said.Global semiconductor shortages are worsening, waiting times are lengthening, buyers are hoarding and potential terminals look less likely to be completed next year. Demand has not slowed as expected, supply routes are clogged and unpredictable production disruptions have battered factories already operating at full capacity.What remains is widespread confusion among manufacturers and buyers alike. Ian Walker, director of operations at Printhorp Electronics, an electronics distributor that helps companies find chips, said some buyers trying to place new orders were told the delivery date was 2024."It felt like we were dying," Walker said.The $464bn semiconductor industry has not kept pace, hurting revenues across sectors, the report said. The pain is spreading from those initially affected, such as carmakers and appliance makers, to manufacturers of other products, such as medical devices and tobacco. The smartphone industry grew just 6 per cent year on year because of chip problems, half its initial forecast earlier this year, according to Us research firm Contrapoint, which tracks handset shipments.Chip makers say supply shortages have reduced sales. "Believe me, we would be shipping more if it weren't for the rest of the industry's component supply chain," Intel CEO Pat Gelsinger said on the company's earnings call last week. Mr. Gelsinger said he expected the shortage to last until 2023.Chip delivery wait times continue to extend beyond the normal threshold of nine to 12 weeks. The wait lasted an average of 19 weeks this summer, according to Hainer Financial Group. By October, that number had ballooned to 22 weeks. Wait times are even longer for the scarcest components: 25 weeks for power-management components and 38 weeks for microcontrollers needed by the auto industry, according to the company.Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, said he thought six months ago that the chip shortage would begin to ease by this point. But now he says the shortage could last until 2023. Wells Fargo Investment Research recently cut its FORECAST for U.S. GROSS domestic product growth to 6.3% from 7% as chip shortages limit the supply of consumer goods."It's been a lot longer than we initially thought," Lane said.The rebound in supply this year is based on optimistic assumptions that production, which has already peaked, will not face further setbacks, the report noted. But the chip-making process has been under threat from beginning to end.Basic manufacturing materials such as substrates are in short supply. Incidents caused by bad weather and fires disrupted chip production, while global shipping strains added to the chaos and delays.Industry experts say chip purchases have almost become a lottery, leading to overordering and, in turn, more supply constraints. 'People are buying a lot of parts just in case, and that's exacerbating the shortage,' says David Shih, a management professor at Harvard Business School who specializes in semiconductors and supply chains.Analysts warn that heavy hoarding could also lead to a inflated sense of demand. That has raised concerns that increased supply across the industry could lead to an oversupply of chips. Chipmakers such as Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and Intel Corp. have announced ambitious investment plans aimed at boosting production, but the plants cost billions of dollars and will take years to open.The auto industry, which was hit hard by chip shortages early on, was the most vocal in demanding more supply, the report said. TSMC, the world's largest contract chipmaker, has boosted car chip output by 60 per cent this year, but carmakers are struggling to recover as plant closures continue and estimated losses mount.Even companies considered to have well-established supply chains -- like Apple Inc. and Tesla Inc. -- have pointed to challenges in meeting customer demand, as a lack of key components has slowed production and revenue growth. Other companies are also warning investors about the long-term impact.