While general things like backpacks, glasses, and even clothing continue to get “smart,” demand for silicon chips has peaked in recent days. As a result, global semiconductor manufacturers face one of the worst chip shortages in the history of chip manufacturing. Now, according to recent reports, major chipmakers like TSMC, Nvidia, and Intel have said that the ongoing chip shortage will continue through 2022 and could even extend into 2023.

Chip shortage

Now if you don’t know what I’m talking about, let me give you a summary. As more and more things have started to become what we call “smart,” the demand for systems-on-chips has outstripped supplies from manufacturers. Because of this, many of the companies cannot buy as many silicon chips as they need due to supply shortages. It is also affecting the smartphone industry, like Samsung, following previous reports, has already announced that it will not launch the Galaxy Note series this year.

Excess demand, lower supply

So, reportedly, in a recent call with industry analysts, the Taiwanese Semiconductor Manufacturing Co (TSMC), which is the world’s largest chip manufacturing company, stated that the severity of the current chip shortage is likely to be will reduce in the next few days. However, the general shortage of silicon chipsets will continue this year and may even extend into the next.

The company reportedly said it is operating at “over 100 percent utilization” to meet current demands for chipsets. Furthermore, citing the current situation, TSMC also stated that it will invest around $ 30 billion for expansion, as its gross margin fell to 49.5 percent compared to 51.5 percent, which the company expected to achieve. Furthermore, the Taiwanese chip giant also stated that it expects revenue to grow 20 percent from last year.

Situation to become stable in two years?

Nvidia, which is one of TSMC’s customers, also commented on the situation, stating that “overall demand is still very strong and continues to outpace supply, while our channel inventories remain quite tight.” Furthermore, the company added that it expects this imbalance between supply and demand for SoCs to continue throughout this year.

Nvidia CEO Colette Kress said Nvidia expects to get “sufficient supply to support sequential growth beyond Q1 [2022].” However, you will not be able to keep up with the growing demand.

Intel CEO Pat Gelsinger also spoke on the subject with The Washinton Post and gave similar responses. According to Gelsinger, “it only takes a couple of years to build capacity” and because of this, creating enough supply takes a little time. So, speaking about the chip shortage, Gelsinger said, “I think this is a couple of years until you can fix it completely.”

So we can expect the current chip shortage to continue for at least another year before reaching a steady state. As a result, we can expect more companies to optimize their smartphone lines and other SoC-based product lines in 2022 and 2023.

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