When will the chip crisis end? The directors’ statements differ

Do you know why the chip crisis started? If you answered the pandemic, you answered correctly. When COVID expanded worldwide in the first quarter of 2020, lockdowns occurred – factories closed. However, soon after the first wave, the demand for chips increased significantly – people bought electronics and cars and suddenly the chips began to be missing from the market. The message was brought by the PhoneArena portal.

When will the chip crisis end, according to company directors?

Cristiano Amon, CEO of Qualcomm, said last week that the chip crisis was easing and the situation should improve over the next year. He also mentioned that chip stocks were better this year than last, and therefore expects the next year to be even better.

TheElec mentions that Samsung was so worried about chips this year that it sent senior staff to the US to negotiate better terms. They came to Qualcomm and asked them to release more of their capacity for the South Korean manufacturer.

TSMC followed the basic rule of the economy – if demand is high and supply is low, we will increase prices. So it increased prices by up to 20%, but not for Apple – for them only by 3%. In this way, smartphone companies also had to increase their prices.

However, the prices of 4G chips increased by 15%, while 5G chips only by 5%. This may sound counterproductive, but demand for 4G chips will continue to be significant until 5G networks become available worldwide.

Finally, it turned out that Samsung Foundry would produce Snapdragon 8 Gen 1 processors using its 4 nm process. Samsung Foundry is the second (after TSMC) largest chip manufacturer in the world.

Not everyone sees it so positively

Other directors don’t see it as rosy as Qualcomm’s boss. Intel CEO Pat Gelsinger recalls that the global chip crisis will continue next year and will last until 2023.

Arm Holdings’ Simon Segars says the chip crisis will only get worse. He thinks the chip crisis will last longer and be worse than others think.

Despite the ongoing crisis, we have seen some surprising new pieces this year. We can mention the Snapdragon 8 Gen 1 or the Tensor chip in the new line of Pixel 6 devices.

By the way, it looks like the chip crisis has hit the smartphone market the least. If we look at the PC hardware sectors, graphics cards from Nvidia or AMD are overpriced and rare, Playstation consoles are expected to take months, and it’s worst for cars. Some models have been waiting for more than a year.