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Is the Chip Shortage Easing? Some CEOs Says Yes

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The semiconductor (chip) shortage has been a problem for the print industry for well over a year, with the chips required for not only for printers and copier/MPFs, but for toner and ink cartridges.

Whether the shortage is easing, or is continuing, depends on who you ask. Following is a look at some current opinions and experiences.

Deloitte Consulting

As recently as December, Deloitte Consulting predicted that the shortage would last to the end of 2023. However, the firm now believes that the end of the shortage is within sight, because the chip industry has boosted capital spending and much-needed factories are starting to come on line.

However, according to the firm, the impact of the shortage is still being felt across PCs, smartphones, datacenters, game consoles, other consumer goods, and especially the auto sector. The cumulative revenue impact of the shortage will likely be over $500 billion in lost sales globally from 2020 to 2022. The chart below shows historical fluctuations in the chip supply, as well as the gradual recovery of supply sinc the start of the pandemic in 2020.

Source: Deloitte Consulting

Hyundai Motors, ABB, Electrolux, Nokia: Chip Situation Getting Better

According to Reuters, executives from auto maker Hyundai, factory robot builder ABB, and refrigerator maker Electrolux, and mobile technology provider Nokia all said this week that the shortage is easing.

Nokia Chief Executive Bjorn Rosengren said the chip situation, which was severe for Nokia at the beginning of the year, has improved for the company: “The good thing to know, it is easing up. Commitments from our suppliers are significantly better.”

General Motors: Chip Shortage Continuing

In contrast, General Motors CEO Mary Barra said this week the auto maker is still working to build inventory, but “frankly, we need more chips to do that.”

IDC: Effects of Ukraine-Russia War

Meanwhile, this week, market-research firm IDC warned that the chip shortages aren’t over, and that the war in Ukraine is a key reason behind the shortages. That’s because both Ukraine and Russia are major suppliers of gases such as krypton and neon that are needed for semiconductor manufacturing.

In an interview with  CNBC, IDC Research Director Vinay Gupta said that semiconductor supply is not going to increase in the immediate future.

“There are a lot of raw materials, gases, which are required for production of those semiconductors,” Gupta said. “This is causing problems in the supply chain that are leading to price increases of components, and ultimately pushing up the cost of end-user equipment.”

U.S. Legislation

Meanwhile in the United States, the U.S. Senate is considering legislation that would provide $52 billion in subsidies to increase chip production in the U.S. The country’s share of global chip production has fallen from 37 percent in the 1980s to 12 percent today.

As of July 26th, the Senate voted 64 to 32 to advance the bill, which is expected to pass in the House. Of the $52 billion, some would go to chip manufacturers to construct semiconductor factories in the U.S., while some funds could be used to draw in more foreign manufacturers to open facilities in the U.S.

Of course, even once the bill is passed, it would likely take at least a year or two for such facilities to begin operating.

Meanwhile market-research firm Gartner released a report this week forecasting that the global semiconductor will grow 7.4 percent in 2022, down from 26.3 percent in 2021. The company said there’s been continued lessening demand for electronics such as PCs and smartphones that require chips, and that in general, the chip shortage is easing.

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