Chip shortage in 2022 and beyond: What you need to know

By Majeed Ahmad, EDN (January 11, 2022)

While the previous blog outlined the root causes of chip shortage in 2021, here is a take on how this IC crunch may pan out in 2022 and beyond. Will the hypercompetitive semiconductor industry allow this shortage to drag into 2022, and as they say, leave money on the table? From the outset, it seems unlikely.

However, it seems most semiconductor companies believe that the supply imbalance will continue in 2022 and possibly even into 2023. Laurie Balch, research director at Pedestal Research, agrees with that sentiment. “IC development and production are not a quick turnaround type of operation,” she said. “There is substantial ramp-up time required to get from design to full-scale production.”

It means that some products ready for production will miss their launch window because of the delays and timing mismatch. New products will fill that void, but that will also take time to go through the full design-to-manufacturing cycle. “Semiconductor fabs will churn out ICs at full capacity,” said Balch. “But I expect that the challenges of rebalancing the mix of semiconductor devices and getting them into customer’s hands will take much longer to settle.”

At the same time, however, IC developers and suppliers now have a better picture of the types of products end users are demanding. So, there’s much less disconnect between what’s being ordered and what’s being produced, Balch pointed out.

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