The chip crunch is here to stay, for now

A year ago, the semiconductor shortage officially became a concern, as a rapid succession of automakers slashed production targets. Since then, the chip crunch has messed with products from washing machines to the Nintendo Switch—and we’re still in the midst of it now.

Industry experts largely expect the shortage to last through this year, although it may begin easing in the second half of 2022, according to some. Let’s take a look at some recent news on the chipmaking front:

• Wait times: Have continued climbing to record highs. It now takes nearly 26 weeks for an order to be fulfilled, per Susquehanna Financial Group research cited by Bloomberg. Pre-pandemic, wait times hovered between ~12 and 15 weeks.
• Record-high demand: Bad news for buyers has translated to good news for major chip-makers. TSMC just reported its sixth-straight quarter of record sales (it made $15.8 billion), and Samsung is forecasting a 52% jump in profit. And after hitting a record high last year, IC Insights expects overall chip sales to break records again this year, rising 11% to $680.6 billion in total sales.
• Nesting shortages: In a matryoshka-like turn of events, there aren’t enough chips, nor are there enough machines that make the not-enough chips, nor are there enough workers to operate the machines that make the not-enough chips.

Looking ahead…TSMC says it will spend at least $40 billion this year to expand its production capacity—a, you guessed it, record-high figure.