Chip shortage won’t end in 2022, hints AMD CEO

Selina Johansson

The semiconductor shortage roiling industries from automakers Ford and General Motors to industrial products maker 3M is unlikely to end in 2022, hints one of the foremost minds in the space.

“There’s tremendous investment that’s happening across the semiconductor industry, whether you’re talking about on the wafer side or on some of the substrates or the back-end assets. So we are making progress. I do believe that the first half of this year will continue to be quite tight. But the second half of this year, I think things will get a little bit better,” AMD CEO Dr. Lisa Su said on Yahoo Finance Live.

Low levels of inventory reflect the rapid buying of semiconductors throughout the pandemic to power demand for work-from-home technologies such as PCs. Demand for chips surged 17% in 2021 from 2019, a new report from the Commerce Department finds.

The median inventory of semiconductor products highlighted by buyers has fallen from 40 days in 2019 to less than five days in 2021, the report says. Inventories in key industries are even smaller, the report contends.

An AMD Ryzen Threadripper 3970X processor, taken on December 5, 2019. (Photo by Olly Curtis/Future Publishing via Getty Images)

“It’s a crisis,” said Commerce Secretary Gina Raimondo on Yahoo Finance Live, referring to the shortage.

To that end, semiconductor makers are staying hopeful that lawmakers will pass the CHIPS for America Act.

The industry’s biggest players such as Intel are now waiting for the U.S. government to do its part and pass the $52 billion CHIPS for America Act. In June 2021, the Senate signed off on the legislation — which aims to incentivize U.S. manufacturing of semiconductors. But, the bill is still being debated in the U.S. House of Representatives.

In the meantime, chip giants like AMD and Intel aren’t siting idly by.

For its part, AMD continues to work very closely with key manufacturing partner Taiwan Semiconductor to secure the supply of its chips it needs to support strong growth in data centers, servers and gaming consoles.

As for rival Intel, it’s investing billions of its own capital to build out new chip-making facilities. The company said Tuesday it purchased Israeli chip-maker Tower Semiconductor for $5.4 billion.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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