The Worst May Be Soon Over For Global Chip Shortage Mayhem According To Analysts
Some of the world's leading chip makers have warned that the global shortage of silicon could linger into next year and perhaps even beyond, as unprecedented demand and disruptions in production from the pandemic (and other factors) have put the industry in a unique situation. Despite the warnings, at least one analyst firm is cautiously optimistic that the alarming semiconductor shortage could ease a lot sooner.
How much sooner? The second half of this year, according to Goldman Sachs. If the prediction holds true, then technically we should see better supply (relative to demand) starting next month, which quite frankly is difficult to fathom at the moment. Call use jaded, but we don't see things like graphics cards and certain high-end CPUs being plentiful in the coming weeks. We hope we are wrong.
Analysts at Goldman Sachs think we could be. They point to "noticeable tightening" within supply chains and subsequent shipment delays, and reckon we currently find ourselves in "worst period" of that right now, before things improve in the coming months.
"That will have an impact on downstream sectors. Auto production is one of those," said Andrew Tilton, chief Asia economist at Goldman Sachs. "Our analysts believe we’re probably in the worst period of that right now. That is, we’re seeing the biggest disruption downstream [in] industries like auto right now and that will gradually ease over the back half of the year."
Will we really see an easing of the chip shortage in the second half of this year, though? Those analysts who say we will are sort of going against the grain, so to speak. Less than two months ago, TSMC said it hoped the situation would improve in 2023, suggesting that the shortage will be an annoying factor not only for the rest of this year, but all of next year as well.
"We see the demand continue to be high," TSMC boss Dr. Wei told Bloomberg in April. "In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit."
Where analysts at Goldman Sachs might be correct, however, is within the automobile sector. While TSMC warned of a lingering chip shortage, it also said it expects supplies will improve within the auto industry starting in the third quarter of this year.
That's good news for companies like Ford, but for PC gamers trying to track down a graphics card like NVIDIA's new GeForce RTX 3080 Ti, we just don't see a sudden influx of inventory in the immediate future. And in general, actual chip makers believe the shortage will last a lot longer.
"Frankly, we are looking at a couple of years before we get enough incremental capacity online to alleviate all aspects of the chip shortage," IBM president Jim Whitehurst recently explained. "We're going to have to look at reusing, extending the life of certain types of computing technologies, as well as accelerating investment in these fabs, to be able to as quickly as possible get more capacity online."
In addition to TSMC and IBM warning of a lingering chip shortage, so is Intel, which recently announced a $3.5 billion New Mexico fab expansion. Both TSMC and Intel have committed to investing billions of dollars in new and improved fab sites, but it will take some time for those investments to have an actual impact on supply. But hey, perhaps Goldman Sachs knows something that the chip makers don't.