Global chip shortage intensifies, hits a 21-weeks record high

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As some of the biggest names in the auto and tech industries plan to attend a virtual meeting with senior US officials at the White House regarding the global chip shortage, the news is seemingly going from bad to worst. The serve chip shortage is affecting production in several industries including smartphones, PCs, and automotive, to name a few.

The automotive industry is set to face the biggest brunt of the chip shortage with analysts forecasting that the entire sector will suffer an estimated $110 billion loss in sales, although other estimates put that figure as high as $210 billion.

According to a report from Susquehanna Financial Group (Via Bloomberg), the gap between ordering a semiconductor and taking delivery increased by 6 days to about 21 weeks in August from the previous month.

The report notes that the gap was already the longest wait time since the firm first started tracking the data back in 2017. Susquehanna analyst Chris Rolland said in a research note; “While lead times for analog and Broadcom Inc. chips got worse, there are positive signs for power management chips and optoelectronic components.”

AlixPartners, a global consulting firm, estimated the global automotive industry will lose about $110 billion in sales. The shortage has forced Peugeot to close plants in Europe, while Ford and General Motors have been forced to close plants in the US. Toyota has also said that it would slash its global production target by 300,000 units as a result of the shortage and the ongoing coronavirus pandemic.

The chip shortage is also affecting other areas and has led to rising prices in both the smartphone and PC sectors. By all estimates, experts and analysts predict that the shortage will last well into 2022.