Global chip shortage will last at least another six months, says Cisco chief: ‘It is a big problem’

With the world currently facing a massive shortage of computer chips due to factors such as the Covid-19 pandemic, the US-China trade war, and drought in Taiwan – the largest manufacturer of semiconductors in the world – the chief of networking giant Cisco said last weekend that this scarcity may last for at least six more months.

Cisco’s chief executive, Chuck Robbins, is the latest in the line of bosses to share thoughts on when the global chip shortage may end, following the heads of Intel and the Taiwan Semiconductor Manufacturing Company (TSMC), who both said recently that the scarcity may last two more years.

“We think we’ve got another six months to get through the short term. The providers are building out more capacity. And that’ll get better and better over the next 12 to 18 months,” Robbins told BBC.

The current shortage is heightened by the Covid-19 pandemic, which at first caused many companies, including car manufacturers to cut down their demand for semiconductors, and then led to chip makers lowering production.

Then as the demand for consumer electronic products like laptops and video game consoles rose during the pandemic, factories have found it difficult to scale up chip manufacture to required levels.

This was worsened when a fire broke out at a major Japanese chip manufacturer ‘Renesas Electronics’ that has cost the company few more weeks before it can get back to full production.

“Semiconductors go in virtually everything, and what happened was when Covid hit, everyone thought the demand side was going to decline significantly and in fact we saw the opposite. We saw the demand side increase,” Robbins noted.

Earlier this month, TSMC said it expects the chip supply shortages to continue through 2022. The computer processor making giant AMD had said earlier this year that it is expecting the semiconductor scarcity to hit the industry even longer.

Pat Gelsinger, CEO of Intel, told Washington Post recently that the problem could take “a couple of years” to abate.

Due to these disruptions, makers of laptops, smartphones, televisions, and other home appliances could continue to see delays in production, and even the manufacturers of domestic gadgets like toasters and washing machines starting to feel the brunt.

“Application processors, display drivers and camera sensors are all in short supply. As a result, we are seeing falling orders from Samsung in the current quarter,” a smartphone parts supplier to the Korean company was quoted saying by Financial Times.