SEMICONDUCTORS The shortage grows longer

 

SEMICONDUCTORS The shortage grows longer

 Francis Scialabba

As Neal over at the daily newsletter wrote last week, the chip shortage was supposed to start easing up in the second half of 2021.  But it’s not: Susquehanna Financial Group found that the average time it takes for a semiconductor order to be delivered—i.e., lead time—increased to 20.2 weeks in July. That’s up from 19.3 weeks in June, and up from 12.6 weeks a year ago.  As Bloomberg notes, the lead times grew most for the chips that go into cars, home electronics, and industrial machinery.  Wait times actually fell for power management chips, which underpin small battery powered devices like smartphones.  In case you need help visualizing the real-world impact, Toyota—which was heralded for its ability to withstand the chip crisis just a few months ago—announced it’d slash auto production in Japan by 40% next month due to...you guessed it. That translates to somewhere between 60,000 and 90,000 fewer vehicles.  Last week, GM, Ford, Stellantis, and VW said they’d likely cut production due to the ongoing shortage, too.  Looking ahead: The semiconductor shortage has been a defining story of this year, and now some companies expect it to spill over into 2022.—DM