Semi shortage update: 5/21

Like a spiky burr stuck on a sock, the global semiconductor shortage is hard to shake off. Here are some recent updates on the semi space.

Lead times: This Tuesday, a report from Susquehanna Financial Group found that the average lead time for all major semiconductor categories rose to 17 weeks in April, up from 16 in March—and amounted to the longest wait time since 2017. And as Ars Technica noted, that’s just the average. For some categories, wait times stretch from 24 weeks to over a year.

Immediate effects: Cisco reported earnings Wednesday, and said its gross profit margin for the current quarter would fall by 1.5 percentage points as it takes on higher costs related to the chip shortage. The company expects the shortage to last through at least the rest of 2021.

$$$: Late last week,South Korea, a major semiconductor player thanks (mostly) to Samsung, announced plans to dole out ~$450 billion worth of chipmaking subsidies over the next decade. For comparison, President Biden has proposed $50 billion in subsidies for US semiconductors.

Bottom line: The shortage, which has already wreaked havoc on industries from electronics to automakers, isn’t going away any time soon. Click here for a deep dive on why we can’t fix this overnight.—DM