Semiconductor shortages were inevitable? What about the future of the market?

During a speech by Cristian Amon, Qualcomm’s CEO at Mobile World Congress in Barcelona, ​​he made an interesting statement that the semiconductor shortage was inevitable. The pandemic did not cause them at all, but only accelerated them, forcing the whole world to react faster because it “made us realize the need for a resilient, geographically diversified supply chain”.

Inevitable semiconductor shortage

According to the CEO of Qualcomm, the industry was already moving towards a semiconductor supply crisis before the pandemic. This was due to the rapidly growing demand for consumer electronics, auto parts and actually “many other things that we don’t realize contain semiconductors.” At the same time, he warned that there is still “a need to invest in much greater production capacity for semiconductor manufacturers” if the world is to avoid the situation that we have been observing for 2 years in the future.

That is why the relatively recent initiatives to secure production capacity for both Europe and the United States are so crucial. I am talking about the 11 billionth initiative European Chips Act in Europe, or Chips for America in United States. If all goes well, manufacturers will be able to source up to half of the semiconductor circuits they need from these two regions of the world.

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Interestingly about Qualcomm’s current situation, in December, Amon said the shortage would end this year, and has now revised that claim to mention that his company continues to feel the effects of the semiconductor shortage, still seeing “more demand than supply.” However, it expects the situation to improve in the second half of the year.