Thursday, October 28

Global shortage of computer chips could last two years, says IBM boss | Technology

The computer chip shortage that plagues industries around the world and helps drive inflation could last another two years, the IBM chief said.

As Ford said it was redesigning some auto parts to overcome crippling semiconductor shortages, IBM Chairman Jim Whitehurst told the BBC on Friday that the tech industry was struggling to keep up with demand brought on by the reopening. of the world economy.

Some factories were forced to close when the pandemic first hit in 2020. The delay in production was compounded by rising demand for chips due to booming sales of laptops, game consoles and mobile phones as people were forced to lock themselves up.

“There is a big lag between when a technology is developed and when [a fabrication plant] it goes under construction and when the chips come out, ”Whitehurst told BBC World Business News.

“So frankly, we’re waiting a couple of years … before we get enough incremental capacity online to alleviate all aspects of the chip shortage.”

He said the industry may have to consider changes in the way microchips are used.

“We will have to consider reuse, the extension of the useful life of certain types of information technology, as well as the acceleration of investment in these [fabricating plants], so we can get more capacity online as quickly as possible, ”he said.

Many automakers canceled chip orders in 2020 when factories were shut down in the pandemic, but they have been hit as demand has recovered faster than anticipated.

Ford has halved vehicle production through June this year due to the crisis and said Thursday it was redesigning automotive components to use more affordable chips. Jim Farley, speaking at Ford’s annual online shareholders meeting, said he was weighing other strategies for the future, including building an intermediate supply of chips and signing deals directly with the factories that make the wafers used in semiconductors. .

The chip shortage has caused automakers around the world to cut production. Last month, Ford said the issue would cost it $ 2.5 billion this year and cut vehicle production in half in the second quarter, when shortages would be worst. Shortages have at times forced Ford to halt production of its highly profitable F-150 pickup trucks.

The loss of production has driven up prices. About a third of the 4.2% rise in US inflation this week was due to higher prices for cars and trucks.

“Inflationary pressures are increasing due to the reopening of the economy, supply chain problems and global semiconductor shortages,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania.

The shortage has also hit industries like the manufacturing of home appliances, from washing machines to toothbrushes that rely on both memory and processing chips.

Samsung, which leads in memory chip manufacturing, has said the production of televisions and other household appliances would be affected by the shortage.

High-end processing chip manufacturing is dominated by Taiwan with 92% of the world’s most advanced semiconductors made by Taiwan Semoconductor, also known as TSMC.

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