Chip shortage shows no signs of abating, may drag into 2022

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Auto manufacturers and other companies are hoping that the global chip shortage will end soon, but snarled semiconductor supply chains may not untangle until next year.

The mess began when the pandemic upended the market for semiconductors. As demand for cars plummeted, automakers slashed their orders. But at the same time, demand for chips that power laptops and data centers skyrocketed. That bifurcation shifted the market, and when car and truck sales rebounded, semiconductor manufacturers rushed to meet demand. Soon, though, shortages of key components emerged. The industry is known for planning-and for its long lead times-so it could take a while for the chip market to sort itself out.

There seems to be a broad consensus that it will stabilize by the end of the year," Chris Richard, principal in Deloitte's supply chain and network operations practice, told Ars. But if I go back to 2008 and the financial crisis, it was a couple years after the rebound started before everything smoothed out again."

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