Global semiconductor shortage may ease in the second half of the year

In 2022, the sudden outbreak of the epidemic in Shanghai will be severe, especially the semiconductor manufacturing industry is facing great challenges. New energy vehicle manufacturers are facing a crisis in raw material supply, and prices have been frequently raised for a time.

 

Conversely, the global semiconductor chip shortage is likely to continue to ease in the second half of 2022, as the gap between supply and demand for most components narrows, according to Counterpoint Research's latest smartphone component tracking report. The shortage of parts and components has plagued many industries for the past two years, and suppliers across the supply chain have made great efforts to resolve the associated uncertainties.

 

This supply-demand gap has been narrowing since the end of 2021, signaling an end to the supply crunch across the ecosystem. Inventories of 5G-related chips including mainstream application processors, power amplifiers and RF transceivers have increased significantly. But there are some exceptions, such as older generation 4G processors and power management chips.

 

According to the figure below, the more red circles, the more critical the shortage of supply in the market. From the short-term level of H1 in 2021 to the short-term situation in 2022, the red circles are significantly reduced. In PCs and notebooks, the supply gap for the most important PC components, such as power management chips, Wi-Fi and I/O interface chips, has narrowed.
 

 

Shipments in the first half of 2022 will be lowered, mainly due to the increase in the inventory of channel vendors and the slowdown in people's consumption of PCs. Considering the expanded production of wafers and the diversification of suppliers, we witnessed a significant improvement in the component supply situation, at least in the first quarter. Right now, the biggest risk factor for the development of the semiconductor industry is the lockdowns that are taking place across China, especially in and around Shanghai. However, if the government can control the epidemic and help industry players in the major semiconductor ecosystem quickly reverse the unfavorable situation, it is believed that the semiconductor shortage in a larger area will be alleviated by the end of the third quarter or the beginning of the fourth quarter.

 

The problem now is not a shortage of stocks, but the impact of national lockdown policies on the entire ecosystem. We are currently seeing a series of domino effects in China from the blockade policy.