Industry News

Will it or won’t it – does the chip shortage end in 2023?

An article posted on AUTOMOBLOG assesses the current chip shortage situation within the context of recent industry surveys performed by multinational accounting firm KPMG and the Global Semiconductor Alliance. The surveys produced a few confidence-related results, highlighting the overall optimistic feeling about the chip supply in 2023.

The article conveys that nearly 65% of survey respondents feel that the chip shortage will improve or has already improved in 2023, and about a third of respondents even believe that we’ll see a surplus this year as well. While the popular opinion of those in the trenches doing the work is valuable and noteworthy, how it actually shakes out this year is anybody’s guess – complex or uncontrollable variables in the global supply chain always leave room for error in studies of this type.

Uncertainty in the automotive industry

Auto manufacturers, however, are still up in the air about the shortage – seemingly more than any other industry.

Some auto manufacturers report feeling quite well concerning their own supply chains, while others remain in a less-than-ideal state. The uncertainty is mitigated, to a point, by reducing vehicle production numbers. Reductions in production are getting better, year to year. The article states that 2023 projected production numbers are reduced by 2-3 million units, but last year and 2021 saw production numbers reduced by 4.3 million and 10.5 million vehicles, respectively. These numbers are helping to drive the sense of “cautious optimism” prevalent in the industry right now.

Some manufacturers are also working around the chip shortage by utilizing fewer chips, removing features requiring processors. This is an assumed stop-gap strategy, potentially reversing once chip supply is less of a concern.

It’s getting better, but stay on your A-game!

Even with numbers improving and optimism in certain manufacturing industries, the article highlights several real-world factors still contributing to the chip shortage – factors like increased demand due to EV production, geopolitical factors, trade tensions, and backlog fulfillment from the last few years. These factors are uncontrollable, to an extent, and will continue to impact supply. New chip production facilities are coming online, and investments in re-tooling existing facilities are also underway, all of which will help supply in the future – but we’ve still got a ways to go.

So, while general opinion is headed in a positive direction, it’s going to pay dividends to be aware that the industry isn’t quite yet back to “normal” and stay on top of your chip procurement processes through the rest of this year.

As an independent component distributor working around the globe, Chip Stock is well-prepared to connect your procurement department with the chips and other electronic components you need to keep your lines moving – our team is ready to answer any questions you may have!

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