For chip buyers ranging from computer gamers to automakers, there is no near-term fix on the way for shortages that have caused higher prices and production delays, semiconductor executives said.
Nvidia Corp, which makes chips that are the basis of graphics cards selling for thousands of US dollars more than their retail prices, sees some improvement in supply in the second half of the year, chief financial officer Colette Kress said on Wednesday at the JP Morgan Tech/Auto Forum.
Her comments led a string of presentations by other executives that similarly repeated their chip companies’ outlook for when supply and demand might reach some sort of balance. The bottom line is that most companies do not see any improvement before the middle of this year and many are saying not even then.
Photo: Bloomberg
Like other chipmakers that outsource their production, Nvidia has struggled to secure enough supply to meet demand. That bottleneck has hurt even the largest companies. Apple Inc, for example, has said it missed out on more than US$6 billion of revenue last quarter, because it could not get enough components.
For one of the companies that provides contract manufacturing, GlobalFoundries Inc, the surge in uses for chips coupled with the time it takes to increase capacity, means that this year would offer scant relief.
“It’s hard to imagine over the next two years a point where we don’t speak about supply issues,” GlobalFoundries CEO Tom Caulfield said during his appearance at the forum. “I don’t see any relief in 2022.”
Automakers have missed out on billions of US dollars in revenue, because they could not get the electronic components that are central to their products. Some of the industry’s chip suppliers stuck to a cautious outlook about when they would be able to fill orders more quickly.
ON Semiconductor Corp CEO Hassane El-Khoury told the online audience that demand would continue to outpace supply for the rest of this year. His company’s chips control the distribution of power in vehicles, particularly those running on electricity.
Analog Devices Inc, another major automotive chip supplier, was slightly more optimistic.
Growing orders would devour all of its supply until the fiscal third quarter, which ends in July, chief financial officer Prashanth Mahendra-Rajah said, adding that the company expects to significantly increase its supply output in the fourth quarter.
All the executives said that the demand is a fair reflection of the needs of their customers.
There is no sign of the kind of hoarding that might cause an inventory glut and later collapse in demand, they said.
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