Delays in chip delivery continue as global shortages worsen

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Global chip shortages continue to worsen, and companies that depend on new chips see production and delivery delays extend to more than a year, and in some cases to 2024.

The global shortage of semiconductors has caused problems for many companies around the world, with slow chip deliveries affecting suppliers ’ability to complete products and complete orders. As the crisis progresses, companies see delays extending further into the future.

In the case of utility monitoring company PowerX, the chip order placed in May was originally expected to be delivered by summer, but was then postponed until autumn, so winter and now is not expected to arrive until May 2022. the Wall Street Journal. PowerX is not alone, as Princeps Electronics chief operating officer Ian Walker said some new customer orders had a 2024 delivery deadline.

Susquehanna Financial Group said chip waiting times increased from a typical 9 to 12 weeks to 19 weeks during the summer, to increase to 22 weeks in October. In some cases, such as power management components, this is an average of 25 weeks, while microcontrollers used by the automotive industry can take up to 38 weeks to arrive.

Apple has also been hit by supply chain problems, warning during its financial results that problems in “legacy nodes,” or modems and power regulators, are a major point of competition for the company. The accessibility of “leading nodes”, such as Apple Silicon, is not a problem for Apple at the moment.

The shortage is caused by multiple problems, ranging from the closure of the COVID-19 plant, reduced supplies of substrates and other basic materials and interruptions to waffle production. Problems with global transportation have added to the problem, as chips can potentially travel up to 25,000 miles to become finished products.

While the chip supply chain is one aspect, the other is the decision to buy chips, with over-ordering and stockpiling causing their own problems. Harvard Business School professor Willy Shih said that “people buy a lot of parts to have just in case, and that only makes the shortage worse.”

Chip manufacturers such as Apple’s partner TSMC have announced plans for large investments in production improvement plants, but it could take years for expensive ventures to not only become operational, but also do enough to ease inventory.

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Naveen Kumar

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