If you’ve been looking to buy anything electronic recently, from phones to laptops to appliances, even to cars, you may have noticed that prices have gone up, or that it is impossible to find these products in-stock. Most people have noticed the effect, but many are still in the dark about the cause.
Manufacturers have seen production delayed because of a lack of semiconductors, a key component of every single modern electronic device. This shortage was triggered by the COVID-19 pandemic. At first, many companies cut their orders for chips, thinking demand would fall, which led suppliers to reduce capacity. However, demand for consumer electronics rose ended up rising during the pandemic, creating a demand semiconductor manufacturers couldn’t meet.
In April Chuck Robbins, CEO of networking giant Cisco, said “We think we’ve got another six months to get through the short term. The providers are building out more capacity. And that’ll get better and better over the next 12 to 18 months.”
Flex, the world’s third largest manufacturer of such semiconductor chips have claimed as of June that the shortage could last another 12 months. With a grimmer outlook being predicted by market research group Forrester. Glenn O’Donnell VP research director at Forrester Research comments saying, “Because demand will remain high and supply will remain constrained, we expect this shortage to last through 2022 and into 2023”.
Of course, the shortage lasting that long does not mean it will affect all markets equally, with individual consumers and SMEs expected to return to a sense of normality long before these predicted end dates.