Editorial StaffWhat, you thought the Great Semiconductor Shortage of 2021 that has roiled industries from automakers to fitness tracking producers was going to end because the calendar turned to 2022?
Think again, as another prominent tech executive has issued a warning on the situation.
“I wouldn’t say we have a great timeline for you as to when things begin to improve. All we know now is we expect this to be with us through the second half of our year,” Cisco CEO Chuck Robbins told analysts on a Wednesday evening conference call.
Robbins commentary echoes others in the industry about two months into the year.
“I do believe that the first half of this year will continue to be quite tight. But the second half of this year, I think things will get a little bit better,” AMD CEO (and Cisco board member) Dr. Lisa Su said on Yahoo Finance Live this week.
Low levels of inventory reflect the rapid buying of semiconductors throughout the pandemic to power demand for work-from-home technologies such as PCs. Demand for chips surged 17% in 2021 from 2019, a new report from the Commerce Department finds.
The median inventory of semiconductor products highlighted by buyers has fallen from 40 days in 2019 to less than five days in 2021, the report says. Inventories in key industries are even smaller, the report contends.
“It’s a crisis,” said Commerce Secretary Gina Raimondo on Yahoo Finance Live, referring to the shortage.
To that end, semiconductor makers are staying hopeful that lawmakers will pass the CHIPS for America Act.
The industry’s biggest players such as Intel are now waiting for the U.S. government to do its part and pass the $52 billion CHIPS for America Act. In June 2021, the Senate signed off on the legislation — which aims to incentivize U.S. manufacturing of semiconductors. But, the bill is still being debated in the U.S. House of Representatives.
Cisco’s new CFO Scott Herren sounded even more concerned than his boss on Wednesday’s call.
“I don’t believe it unwinds in a lumpy fashion. I think that will unwind as supply and demand get more imbalance and I think that will just happen gradually over the course of the next few quarters. So I’m not expecting a significant bump in any given quarter,” Herren said.
Source: Yahoo Finance
