“With such strong demand, the expectation is mid- to late 2022 depending on the commodity. Some are expecting [shortages to continue] into 2023,” she said.
The forecast from Flex, which sits at the heart of the supply chains for the car, medical devices and consumer electronics industries, follows a bruising six months during which shortages have forced car companies to scale back production and lay off staff.
The issue has led many companies to adopt a more assertive approach to sourcing, such as by paying for chips in advance. Tesla, the US electric-car maker, has explored buying a chip plant outright.
Serious look at restructuring
Electronics manufacturers in Asia have also recently warned that the chip shortage was beginning to spread to TVs, smartphones and home appliances, with the situation made worse through stockpiling by Chinese groups hit by sanctions.
Pandemic-related problems with supply chains have been compounded by the blocking of the Suez Canal in March, the extreme cold weather in Texas, and a recent fire at a large chip factory in Japan.
Flex chief executive Revathi Advaithi said the disruption wrought by the pandemic was prompting its multinational customers to take a far more serious look at restructuring their supply chains than the trade war between the US and China ever did. This could include making them more regional, she added.
“Most companies won’t make a decision to regionalise just on tariffs,” she said. “They know it could be a short-term thing but things like the pandemic and escalation of shipping costs that impact the total cost of ownership drives regionalisation.”
New York-listed Flex, which recorded $US24.2 billion ($31.3 billion) in revenue last year and has manufacturing facilities evenly split between Europe, Asia and the Americas, has been forced to interrupt production for a wide range of electronics products.
Chipmakers are investing in new production capacity but it can take up to two years to set up the complex facilities.
Ms Torrel said the picture could improve if COVID-19 vaccinations cause consumer spending to shift towards services and people spend less money on consumer electronics as the world recovers from the pandemic.
However, she cautioned that seemingly small problems – such as a recent two-week lockdown in Malaysia, where many semiconductor suppliers are based – can have an outsized effect on supply chains already under pressure.
Financial Times
The Link LonkJune 07, 2021 at 12:31PM
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Chip shortage to last until at least mid-2022, warns manufacturer - The Australian Financial Review
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