Supply to Finally Catch Up With Demand?

Microchip supply chain issues have been causing serious concerns for the tech industry. The problem has been exacerbated by COVID-19 and Russia’s invasion of Ukraine. A report by Accenture predicted that the supply chain challenges could result in a €920 billion cumulative loss to the gross domestic product (GDP) across the Eurozone by 2023.

Lead times for some advanced chips needed for medical devices, telecoms and cybersecurity systems have reportedly extended to approximately 52 weeks. This is compared to a previous average of 27 weeks, according to data from Everstream. This doesn’t, of course, factor in product manufacturing time.

“In addition to impacting the ability to produce and meet the demand for existing products, the lack of chip availability has meant a reduction in the capacity to develop new products. Older generations of chips that are used in the manufacture of white goods, for example, are made using equipment that has been used for several years. Innovative new components that run AI models and render graphics in the latest smartphones and computers, however, require cutting-edge technology to manufacture.

“While this all paints a challenging picture, things may be looking up. With the cost of chips being reduced and consumer spending cooling down for a myriad of reasons, supply may yet catch up with the demand in 2023. While there are immediate challenges to navigate, we are likely to see the pressure taken off the microchip industry next year.” – Neil Patel, marketing director, D-Link