What to Expect From Chip Shortages In 2022

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A report by a leading data and analytics company said that the ongoing chip shortage will continue to affect key industries – some more than others.

According to the study carried out by GlobalData, the shortage will mainly affect the 5G, pharmaceutical and batteries sectors.

The report, titled “Tech, Media, and Telecoms Predictions 2022,” also states that tensions between the US and China over semiconductors and minerals will remain prevalent for most of the year. Daniel Clarke, an analyst with GlobalData’s Thematic Research Team, said that consumers should expect the automotive and technology industries to be the most impacted.

“For the automotive sector, it means that new car sales will not be as high as automakers would like, simply due to production issues,” he said. “For the tech sector, smartphones and gaming consoles will continue to be affected. Consumers will be impacted by rising prices or a general lack of widespread availability. This is because tech companies will either decide to absorb the cost internally or pass the cost onto the consumers.”

Clarke added that the pressure on the tech industry in terms of inventories would be less compared to last year.

“The emergence of a new variant, which could lead to countries locking down for a short period could put further unexpected pressures on the shortage in 2022,” he said. “Although, in this hypothetical scenario, the demand side pressures created by working from home would not be as disruptive, as most of those working from home will have already bought consumer electronics equipment in the previous lockdowns.”

Clarke went on to say that the key to solving the chip shortage would be greater investment in chip production from the West, including exploration, extraction and processing of critical minerals to not only increase supply but also diversify it.

For more information, read the original story in ZDNet. 

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