The Bulletin by Executive
The computing chip shortage has wreaked havoc on global supply chains for more than two years. Now, its end is finally in sight. But the recovery will be uneven: We project some industries will start to see improvement by the end of this year, while others might not turn the page until 2024 or later.
The automotive and industrial sectors, among the hardest hit by the chip shortage, will be the fastest to recover, according to Bain & Company analysis. We anticipate that supply bottlenecks in these sectors will begin to improve in late 2022 and early 2023. Their products rely most heavily on semiconductors in two categories—“leading-edge” 12-inch wafers and “lagging-edge” 6-inch and 8-inch wafers—that will see manufacturing capacity meaningfully increase over the next 9 to 12 months, thanks to new fabs coming online. These types of chips make up more than 90% of the semiconductors used by automotive and industrial companies
Consumer electronics, including smartphones and tablets, will also rebound from the chip shortage over the next year or so. These products depend on the 6-inch, 8-inch, and 12-inch wafers whose supply is increasing, and they also use other types of semiconductors that have been more widely available.
On the other end of the spectrum, we expect shortages to hamper several sectors through 2024, including gaming consoles and computer servers. As demand for these products has jumped during the Covid-19 pandemic, the supply of “bleeding-edge” wafers has kept up, but production of the accompanying advanced substrate components has not. These suppliers lack the financial resources to build their substrate factories fast enough to meet rising demand. The bleeding-edge chips reliant on these substrates make up nearly 50% of the semiconductors used in servers and more than half those used in gaming consoles.
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