Business Standard

Car chip shortage to abate; smartphone­s next: Experts

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The semiconduc­tor shortage that has gripped the world could last well into 2022 and hit smartphone production next, foreshadow­ing deficient supply for a range of appliances and industrial equipment, industry executives and an economist said.

The automotive sector has suffered the most this year but supply to the sector could improve relatively soon, with China taking up some production demand that Taiwan could not meet, ING Greater China chief economist Iris Pang told Reuters Global Markets Forum this week.

Taiwanese semiconduc­tor companies have boosted production in China as blackouts and ongoing Covid19 social distancing measures disrupted factory output and port operations in Taiwan, she said.

“China gained 5 per cent on the chip shortage in terms of GDP — Taiwan semiconduc­tor companies have planned well and built large factories in mainland China,” Pang said, predicting that smartphone makers will be the next segment to face disruption­s.

“Taiwanese semiconduc­tor companies are tailoring making chips for autos, so the chip shortage should be solved for autos in a few weeks, but other electronic­s’ chip shortage problem persists,” Pang said, adding that could delay shipments of some new model smartphone­s.

Companies across industries globally have warned of an ongoing struggle to source chips.

ASML, one of the world’s biggest suppliers to semiconduc­tor makers, hiked its sales outlook this week on strong orders as chip giants such as TSMC and Intel raced to boost output.

The broader supply crunch could last until the second quarter of 2022, said Adam Khan, founder of AKHAN Semiconduc­tor, although he noted this timeline was “aspiration­al.”

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