How the Semiconductor Shortage Increases Lead Time & Generates Supply Chain Risks
Since the beginning of 2021, the discrepancy between the increasing demand for semiconductors and the lack of available supply has become a worldwide news event. In fact, semiconductor shortages have been reported across almost all major IC groups. While the most obvious impact has been within the automotive industry (the lack of critical semiconductors led to shutdowns of auto factories for all the major manufacturers), the shortage has undoubtedly generated supply chain risks across the board.
The Cause Behind the Shortage
Numerous factors played a role in straining the semiconductor ecosystem, all the way from foundry to backend OSAT capacity. Some of the most notable include:
- Increase in consumer purchases of digital devices during the COVID shutdown to enhance connection and productivity
- Accelerated build-outs of data centers
- 5G handset and infrastructure investments
- Exponential demand for cyber currency mining hardware
These factors all drove increased overall demand for a wide range of semiconductors, from microprocessors and power management ICs to memory controllers and various logic ICs. In addition, factory disruptions and US-China trade tensions exacerbated an already tight supply situation.
Every quarter, Sourcengine publishes a comprehensive lead time report covering the supply chain electronics industy and has established that the worldwide component bottleneck will not ease up until late 2021 or even into 2022.
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