Chip Shortages Could Extend into Next Year, Taiwanese Supplier Warns

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Taiwanese panel supplier Innolux Corp. says the current chip shortages could last beyond this year, becoming the latest manufacturer to warn that competition for semiconductors may persist for some time.

“Supply at foundries is very tight. Capacity in the chip packaging and testing space is also tight,” James Yang, president of the Foxconn affiliate, told analysts at an earnings conference on Wednesday. “The chip supply bottleneck could still remain unresolved in the first half of 2022.”

Some chip packaging equipment now takes 11 months to ship, Yang said. Chipmakers aren’t expanding capacity for 8-inch wafers needed for power management chips and display driver integrated circuits, he added. Automakers and 5G smartphones both need power management chips so the overall supply is getting even tighter, the executive said.

Chip shortages are expected to wipe out $61 billion of sales for automakers alone and delay the production of a million vehicles in the March quarter, but the fallout now threatens to hit the much larger electronics industry. Possibly a broad spectrum of chip-heavy products from cars to phones and gaming consoles could see shortages or price hikes.

About 3% to 5% of total panel supply could suffer shipment delays, though the impact on Innolux so far has been slight, Yang said. Panel demand will outpace supply this year, he added.

©2021 Bloomberg L.P.

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