The global chip crisis worsened through 2021. Deloitte’s latest report expects the shortage to persist through 2022, with delivery times stretching 10 to 20 weeks and relief arriving only in early 2023.
Pandemic disruptions hit chipmaking capacity in the US, Southeast Asia, Korea and Japan hard, while Texas’s winter storm and a fire at a Japanese chip plant compounded the damage.
Normal delivery cycles ran 6 to 9 weeks in 2019. By July 2021, average lead time had stretched to 19 weeks; by October, 22 weeks; and December added six more days over November, reaching about 25.8 weeks – the longest since tracking began in 2017. ‘Practically every product category is at record lead times, with power management and microcontrollers (MCUs) most prominent,’ said analyst Chris Rolland.
Electronics felt it keenly – Apple’s iPhone 13 Pro and MacBook Pro shipments slipped two to four weeks – and the auto industry worse still: AlixPartners estimated the shortage would cost the global auto industry USD 210 billion in 2021 revenue and cut net production by 7.7 million vehicles.
India’s automakers felt the squeeze: Suzuki’s December sales fell 4% year on year. ‘Semiconductor-related parts remain the industry’s challenge and our main focus,’ said Mahindra’s automotive division CEO, while Tata Motors’ executive director warned that the continuing shortage, compounded by the pandemic, would pressure domestic demand.
Beyond pandemic-hit capacity and logistics, the shortage reflects rapid enterprise digital transformation and surging consumer electronics demand. Multiple semiconductor types have run short since mid-2021 – especially high-end 3nm, 5nm and 7nm process chips – causing over USD 500 billion in economic losses. Deloitte expects chip prices to rise across all grades in 2022 and venture capital to pour more than USD 6 billion into semiconductor startups.
Intel’s CEO expects the shortage to run into 2023; AMD’s CTO likewise sees supply and demand balancing – and the crunch ending – in 2023.
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