Electronics Sector Continues to Be Affected by Global Chip Shortage

The Chip Shortage Presents Itself In This Third Quarter Of 2022 In A Milder Form, But With Certain Supply Delays

The electronics sector has gradually been experiencing less difficulty in chip supply. However, the recovery of the sector has been quite slow, with persistent irregularity in chip supply still hindering the production of a large part of the electronics factories.

According to an analysis conducted by Abinee associates, an entity representing the electro-electronic product industry, the number of factories struggling to find chips in the market fell last month to 62% of the total whose products depend on this item. Although this number is considered very high, it is still the lowest in a year.

The global chip shortage has become the biggest bottleneck in the electronics sector, and with lockdowns in China, including the closure of the Shanghai port for about two months, the difficulty in acquiring chips occurred in May in three out of four companies in the electronics sector.

During July, about 48% of electro-electronic device factories faced delays or, to a lesser extent, a halt in part of the production due to the shortage of electronic components. After peaking at 57% in May, the share had already dropped to 50% in June.

With logistical bottlenecks since the beginning of the pandemic, further exacerbated by the combination of the war in Ukraine and the slowness in customs clearance due to the standard operation of tax inspectors, Abinee’s indicators suggest that the chip shortage remains far from normalcy.

More than half of the factories producing items like cell phones, laptops, and TVs expect only next year to normalize the supply of electronic components. There is a divide among companies as to whether the flow will normalize in the first or second half of the year.

Every five factories of electronic products, one remains with stock levels of components and raw materials below normal. In terms of imported parts, 65% still complain, according to Abinee’s survey, about delays in receiving shipments.

Chip Shortage May Persist Until 2024

The Intel sector dealing with PC chips noted that laptop and desktop sales fell 13% in the first quarter of the year, about US$ 9.3 billion, according to a balance sheet released by the company. Gelsinger, Intel’s CEO, states that the sales slowdown was mainly caused by the decline in consumer demand for low-cost PCs, while corporate demand for computers remained strong.

The Intel CEO also stated that the global chip shortage, which he previously predicted would last until 2023, will likely last even longer, as chip manufacturers struggle to purchase enough equipment to ramp up production to meet demand.

Pat believes that the shortage will last until 2024, as the lack of equipment is affecting the industry’s ability to increase supply at a steady pace. The Intel CEO adds that such challenges will not hinder the expansion of the industry he leads, Intel, which includes new factories in the U.S. and Europe in the coming years.

Various sectors of the chip industry are being directly impacted by the chip shortage in the market, a scenario that has persisted since 2020 and has gained momentum throughout the Covid-19 pandemic.

Despite the tireless efforts of several industry giants, such as Intel, plans for new chip factories as well as the expansion of existing chip industries will not change the situation in the short term, according to experts. However, a viable solution to alleviate the problem is to improve yields in the chip manufacturing process, something that can be achieved through a newly refined printing technique.