The semiconductor shortage issue has already affected various industries across the globe. Now, the situation has apparently worsened as wait times for chips have hit a record high of 18 weeks.
According to a Bloomberg report, automobile makers and consumer electronics based brand have to wait even longer for components since delays in filling orders continue to worsen. The lead times for chips, which is the gap between ordering a semiconductor and receiving the delivery, have risen from just a single week to a whopping 18 weeks back in May 2021. This is an indicator that chip makers are currently struggling to keep up with the demand.
Furthermore, the wait times are the longest since 2017, with the peak being four weeks back in 2018. The report added that power management chips that regulate the flow of electricity in machines and consumer electronic products are a primary reason for the overall increase in delivery periods. The lead times for this chip hit a significant 25.6 weeks, which is nearly two weeks longer than a month before.
Chris Rolland, an analyst from Susquehanna Financial Group, added that “The broad based nature of the shortages is highlighted by the data, as most key product categories (power management, discretes, analogs, passives) have seen LT expansion.” The rising demand also suggests of the panic buying from vendors across the globe that are ordering too much, which has further worsened the situation, as per Rolland.
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