Chip Shortages to Persist For at Least Another Year: Analysts

The semiconductor industry is notoriously slow when it comes to reacting to sudden increases in demand. Some analysts believe that demand for chips now exceeds supply by about 30%, and it will take three or four quarters for the supply to catch up with the demand. Essentially, this means that chip shortages will persist well into 2022.

Chip Demand Is Booming

Nowadays, virtually all electronic devices have chips in them, so the demand for semiconductors is generally at an all-time high. Furthermore, these chips are getting more complex (i.e., harder to produce), and the number of chips per device is growing. Last year several additional factors increased the demand for chips to levels way above what the industry can supply.  

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