Global chip shortage expected to persist until second quarter of 2022: Gartner

To address the shortage companies are looking for government aid given that increasing capacity at short notice is difficult. Tech giants such as Apple, Microsoft and Google, who are one of the biggest chip buyers, are joining hands with top semiconductor chip makers such as Intel to create a new lobbying group to press for government chip manufacturing subsidies, according to media reports.

The chip shortage could be due to multiple factors such as plants shutting down due to COVID-19, consumers stocking up on electronic products leading to tighter inventory, and also sanctions against the Chinese technology companies, reports explains.

The Gartner report has recommended that the OEMs extend the supply chain visibility, and partner with similar entities and approach chip foundries as a combined entity to gain some leverage. Diversification of supplier base, the report said, can also help reduce risk in the long-term.

“Additionally, if scale allows, pre-investing in a commoditized part of the chip supply chain and/or foundries, could guarantee the company a long-term supply,” the report adds.

“Since the current chip shortage is a dynamic situation, it is essential to understand how it changes on a continuous basis. Tracking leading indicators, such as capital investments, inventory index and semiconductor industry revenue growth projections as an early indicator of inventory situations, can help organizations stay updated on the issue and see how the overall industry is growing,” said Gaurav Gupta, research vice president at Gartner.