Semiconductor Chips Face Longer Lead Times as Supply Chain Is Dealt Another Blow From China Lockdowns

The suffering supply chain, which has been stunted by covid restrictions in the form of lockdowns, are getting even worse as the world faces a severe shortage in computer chip manufacturing.

Computer chips play an intricate part of our modern world and without them – well, we won’t be able to function as we are.

According to Bloomberg, the wait times for semiconductor chips has risen yet again after China went back into lockdown in the city of Shanghai, one of the world’s largest port cities. An earthquake in Japan also hindered supply.

Susquehanna Financial Group indicated that lead times have gone up by two days, making it now around 26.6 weeks (six months) before the chips are delivered to customers.

Bloomberg News reported:

While chip users are facing longer wait times again, the lead times are growing much slower than in 2021, when many industries were forced to slash their production because of a lack of the critical components.

Lead times increased for most chip types, including power management, microcontrollers, analog and memory, according to a report by Susquehanna analyst Chris Rolland.

The pandemic lockdowns in parts of China, the quake in Japan and the new war in Ukraine all “will have a short-term impact in the first quarter but may have lingering effects on the severely constrained supply chain through the year,” he said.

First world countries are suffering the most at the delays and the shortages literally have an impact on economies around the globe – the most affected areas are the U.S., Europe and Asia as smartphones and other devices need the chips to operate.

“Semiconductor producers had pared invested in increasing output from their factories, and the sudden scarcity of chips disrupted production of everything from smartphones to pickup trucks. It also contributed to inflation by boosting supply costs,” Bloomberg News added.

Industry executives and experts are now warning that the supply shortage will continue throughout 2022 and most of 2023. Manufacturers like Samsung and Intel will not be adding to their production until at least 2023, so supply will stay tight for the foreseeable future.

Over 90 percent of the neon gas used to produce chips in the U.S, comes from Ukraine, and the war they are currently in with Russia, is only going to make things much worse as Ukraine has already moved to cut off exports of much needed grain and wheat and worryingly, neon supplies could be next.

A research firm, Techcet stated that around 35 percent of the United States palladium, a rare earth mineral, comes from Russia and is used in the production of semiconductors.

The Semiconductor Industry Association (SIA) has also said that “the semiconductor industry has a diverse set of key materials and gasses, so we do not believe there are immediate supply disruption risks related to Russia and Ukraine.”

With the current murmurs of further lockdowns, following in the steps of China, could potentially knock the supply of these chips back years.


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5 thoughts on “Semiconductor Chips Face Longer Lead Times as Supply Chain Is Dealt Another Blow From China Lockdowns”

  1. What happened to the microchip mfg. in TX back in the 1990’s?! A couple of the big names in the industry were Dallas Semiconductor and McDonald Technologies, among others. Stop farming out the production to China and bring it back to the U.S. where it belongs! Put businesses such as those I have mentioned back in the business of making these needed computer chips where there are NO lock-downs and there would be no interruption in the supply chain. Period!

    1. This is exactly why Trump coined the phrase “America First” and initiated the practice of bringing jobs back to America. Now under Biden and the “America Last” policies of the leftist controlled Democrat Socialist Communist Nazi Globalist Party America and the world are suffering! “America Last”, criminal mishandling of the Covid crisis, unconscionable spending, destruction of domestic oil and gas production have, unconstitutional treasons to American voting rights all have lead to crisis after crisis. These despicable practices have contributed to world wide inflation leading to depression, fuel shortages, supported Russian aggression in Ukraine and so much more.

  2. You rite those companies go in china and now they are hostage of the government for political reasons it not for covid it to put pressure on USA and to break the people that don’t like the actual tyranny of CCP in those major town (it Americanized)it all about vote and pressure on American Just
    stop buying china stuff what you don’t understand american!!! ( They steal your technology and sale back to you)
    Those are our enemy not our friends wake up they just like to destroy American
    Thanks to reflect on that’s
    Robert

  3. Intel has factories in the USA, They can easily produce semi conductor chips. May not be as cheap as the Chink junk. The greedy CEO’s in the USA are part of the problem, putting their bonuses & profit over America first.
    The scumbags have been allowed to “Out Source” way to much for way to long. On top of the outsourcing, these greedy companies balance their check books on the backs of their labor force, causing their low wage earners to qualify for public assistance, All the while collecting six digit incomes & bonuses. Corporate Greed is a BIG part of the problem.

  4. When supply chains get too long there are many possible snags that can arise. Conflict being probably the most impactful. Strategic supplies are a national security necessity and should be almost completely manufactured here to insure this doesn’t happen again.

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