The global shortage of semiconductor chips could last three to six months, Logitech (LOGN.S) Chief Executive Bracken Darrell told Swiss newspaper Finanz und Wirtschaft, with some industries facing shortages of up to a year.

“Like others we have felt the shortages, but we have been able to cushion them well,” Darrell said in an article published on Friday. “It takes time to ramp up production but in the meantime, prices have also adjusted.”

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The computer peripheral maker has used new suppliers for some parts, Darrell said, as in some cases its main suppliers did not have enough capacity.

The world biggest contract chip manufacturer, TSMC’s chairman Mark Liu was present at the annual general assembly of the Taiwan Semiconductor Industry Association as the chairman of the organization and told reporters, “We believe currently the total production capacity is still bigger than real market demand”, as quoted by the Nikkei Asia Review.

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He said the reasons of the current global chip shortage were more to do with imbalances and uncertainty in the supply chain and not the lack of capacity itself. He pointed out three main causes of the global chip crunch.

The Covid-19 effect on the semiconductor production, the unpredictability and uncertainties due to the US-China trade war and the accelerated digital transformation have been brought about by the pandemic.

Beside the above reasons He mentioned two more long term factors had affected positively for the chip demand, the 5G and High-performance computing, both ITC mega-trends had existed before the pandemic as the building blocks of the Industrial 4.0.

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As Liu explained unpredictability and uncertainties in the global chip industry were mainly caused by the US sanctions against the Chinese tech companies.

Huawei, the market leader and major competitor in 5G, was the main target and has been effectively curbed from any chip manufacturing capacity containing US technology since 15th September 2020.

The upshot was, Huawei’s rivals scrambled to fill the market share it left and in order to meet the expected rising demand they have placed extra orders for chip.

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Above that, the US export control triggered uncertainties made the electronics manufacturers, specially the Chinese ones to secure their chip supply by stockpiling and this led to a so called “double-booking” effect, meaning many companies in the industry are holding more chips on their shelves than they actually need to use.


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