Chip Shortages Could Last for Several Years

Recent chip shortages could prove to be bigger difficulty than just a short term problem. According to some industry leaders, they might last from several quarters to several years.

Ericsson CEO Borje Ekholm recently stated that the global chip shortage would continue into 2022, increasing the liklihood the vendor would be affected after so far managing to mitigate the impact. Ekholm noted the shortage had a limited impact on it so far, with expectations it would continue to avoid any significant repurcussions in the near term.

Ericsson began diversifying its supplier base almost three years ago, helping it weather current shortages and leaving it positioned to be able to continue to supply their customers like they have in the past. But, Ekholm conceded the longer the shortage persists the more risk it will be for the company. Given the lead time to increase capacity is long, Ekholm expects the shortage to last.

Intel CEO Bob Gelsinger reiterated something similar this week. He said that it could take several years for a global shortage of semiconductors to be resolved. Gelsinger told that the work-and-study-from-home trend during the COVID-19 pandemic had led to a cycle of explosive growth in semiconductors that has placed huge strain on global supply chains.

"But while the industry has taken steps to address near term constraints it could still take a couple of years for the ecosystem to address shortages of foundry capacity, substrates and components," added Gelsinger. In an interview in mid-April for The Washington Post, Intel CEO said the shortage was going to take a couple of years to abate.