Gartner predicts chip shortage to ease by second quarter of 2022

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Gartner predicts chip shortage to ease by second quarter of 2022

Urges OEMs to tighten relationships with resellers, disties.

The semiconductor shortage should be over by the second quarter of 2022, according to a statement from Gartner.

“The semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021. Foundries are increasing wafer prices, and in turn, chip companies are increasing prices,” said Gartner principal research analyst Kanishka Chauhan.

The ongoing chip shortage has been described as ‘unprecendented’ and while it started with devices like power management, display devices and microcontrollers, it has gone on to have a wide-ranging effect that includes substrates, wire bonding, passives, materials, and testing, all of which are parts of the supply chain beyond chip fabrications, Gartner said.

Across most categories, device shortages are expected to be pushed out until the second quarter of 2022.

Source: Gartner (May 2021)

The release outlines some key actions that Gartner analysts recommend OEMs take to mitigate the impact on themselves, and those further down the supply chain.

One of these suggestions is for them to create tighter, strategic relationships with distributors, resellers and traders in order to source smaller volumes of urgent components.

This is part of a recommendation to diversify their supplier base, considering ways that they can source chips or components, even beyond looking at different foundries and outsourced semiconductor assembly and test (OSAT) partners.

Other suggestions include extending supply chain visibility to the silicon level in order to aid projections, joining forces to approach chip makers as a combined entity, pre-investing in a part of the chip supply chain to ensure supply in the long-term, and combining relevant parameters to improve tracking of the situation, 

“Since the current chip shortage is a dynamic situation, it is essential to understand how it changes on a continuous basis. Tracking leading indicators, such as capital investments, inventory index and semiconductor industry revenue growth projections as an early indicator of inventory situations, can help organisations stay updated on the issue and see how the overall industry is growing,” said Gartner research vice president Gaurav Gupta.

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