No relief in sight for automakers: Global semiconductor shortage likely to last until end-2022, says Arm CEO

The semiconductor industry is currently investing some $2 billion per week, which will eventually lift production by 50 percent, but supply is set to remain tight in the near term.


The shortage of computer chips that is hobbling auto manufacturers will last until the end of next year, the head of a leading designer of semiconductors said on Tuesday.

Arm Holdings chief executive Simon Segars said that the semiconductor industry is currently investing some $2 billion per week, which will eventually lift production by 50 percent, but that supply will remain tight in the near term.

"Where are we going to be next Christmas? I expect this supply chain constraints to be a little better, but it won't be completely fixed," Segars said at the Web Summit in Lisbon.

"This isn't a short-term problem with a short-term solution."

A researcher plants a semiconductor on an interface board during a research work to design and develop a semiconductor product at Tsinghua Unigroup research centre in Beijing, China, February 29, 2016.  REUTERS/Kim Kyung-Hoon  - D1AETETVAHAA

A researcher plants a semiconductor on an interface board during a research work to design and develop a semiconductor product at Tsinghua Unigroup research centre in Beijing, China, February 29, 2016. REUTERS/Kim Kyung-Hoon - D1AETETVAHAA

Britain-based Arm is a designer of computer chips that are used to power many consumer electronics devices, and is in the process of being bought by US firm Nvidia from Japan's Softbank in a $40 billion deal.

The semiconductor industry was overwhelmed as consumers stepped up purchases of electronic devices during the coronavirus pandemic. That increased demand, along with disruptions caused by COVID-19 lockdowns, has caused shortages.

The auto industry has been particularly hard hit, with shortages expected to block the production of 7.7 million vehicles this year, according to one estimate.

Segars, who was among the first employees Arm hired after its founding in 1990, said the semiconductor industry is known for being cyclical but that the current situation is unprecedented.

"We've been in situations before where there has been in some cases over supply, in other cases under supply, but it's never been like it is right now," he said.

Segars said the delay for some chip orders is now stretching over one year.

"That is just unprecedented," he said.

Also read: Automobile sales during 2021 festive season the worst in a decade, says FADA


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