Wednesday, October 20, 2021

Global semiconductor chip shortage could extend ‘painful period’ to 2022: Marvel CEO

According to the CEO of semiconductor company Marvell Technology, the global semiconductor chip shortage, which is affecting the production of automobiles and consumer electronics, will last until 2022 and possibly beyond.

“Right now, every single end market for semiconductors is up together; it’s been 27 years in this industry I’ve never seen before,” said Marvel CEO Matt Murphy during an event at the CNBC Technology Executive Council on Thursday. Said. “If it stays in business as usual, and everything is up and to the right, it’s going to be a very painful period, including 2022 for the period of the year.”

While several chip producers, including Japanese chipmakers Renesas Electronics, Intel and TSMC, have expressed plans to double down on manufacturing, Murphy said that “it’s not going to kick in until 2023 and 2024 — so it’s a painful period.”

Last month, consulting firm AlixPartners predicted that a global semiconductor shortage would lead to 7.7 million fewer vehicles being produced in 2021, causing automakers to lose billions in sales.

In a forecast released on September 23, the firm estimated the shortfall would cost the auto industry $210 billion globally in 2021, a sharp increase in sales of $110 billion and 3.9 million fewer vehicles built than May’s estimates. Will happen.

Mark Wakefield, global co-leader of the automotive and industrial practice, said: “Everyone expected the chip crisis to be over by now, but unfortunate events such as the COVID-19 lockdown in Malaysia and continuing problems elsewhere have turned things around.” has been extended.” AlixPartners said in a statement.

Wakefield noted that the current semiconductor crisis is one of several supply issues that automakers are facing along with material and labor shortages.

But some industry experts have a more promising outlook for the future, and believe chip shortages could be resolved as early as next year as new factories planned for last year open up. and increased manufacturing capacity.

“We’ve always gone through cycles of ups and downs where demand exceeds supply or vice versa,” AMD CEO Lisa Su said Monday at the Code conference in Beverly Hills, Calif. “This time, it’s different,” she said, adding that while she expects the first half of 2022 to be a “tough one”, the second half could see improvement.

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“You know, it can take 18 to 24 months to set up a new plant, and in some cases even more,” Su said. “These investments were probably started a year ago.”

Murphy said he believes chip shortages could see a decline when demand for some chip-using products eventually begins to fall, allowing producers to keep up with demand.

“I think there’s no way, from my point of view, that every segment of the electronics industry stays on the up and right, and bullish demand for 12 months; it doesn’t make sense,” Murphy said on Thursday. That’s something to give. And when it does it should free up aggregate capacity for the rest of the industry to consume and eventually align it with actual demand.

Still, car makers in particular are facing stiff competition from the consumer electronics industry amid supplies in the chips, forcing many to cut production.

General Motors announced several weeks ago that it was cutting production at six North American assembly plants due to chip shortages, while Chrysler parent Stelantis NV said last week that it was cutting production at three in the United States and Canada. Was cutting excess production at facilities. And Ford announced in late August that it would be temporarily closing its Kansas City assembly plant, which manufactures its best-selling F-150 pickup truck.

Tom Ozimek contributed to this report.

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Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.

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This News Originally From – The Epoch Times

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