Global chip shortage may last until 2023, says chipmaker Infineon's CEO

The chip crunch this year is hurting production at companies from Tesla to Apple and Microsoft Corp. PHOTO: AFP

BERLIN (BLOOMBERG) - The global chip shortage that is hampering companies from carmakers to computer manufacturers may linger for years, according to Germany's biggest semiconductor company, Infineon Technologies.

The scarcity "may stretch into 2023" in areas where capacity expansion is slow to catch up with consumer demand, Infineon chief executive Reinhard Ploss said in an interview with Frankfurter Allgemeine Zeitung.

"Building new facilities and clean rooms in which the silicon wafers are processed into chips can take two to two and a half years; upgrading existing facilities three-quarters to one year," he said.

The chip crunch this year is hurting production at companies from Tesla to Apple and Microsoft Corp. The amount of time it is taking for manufacturers to get orders filled stretched to more than 20 weeks last month, worsening from June, research by Susquehanna Financial Group showed.

Increased work-from-home needs and the catch-up effect in the automotive industry following pandemic-fuelled delays have become major drivers for the chip industry, according to Dr Ploss. He also cited faster adoption of electric cars and growing demand for renewable energy among factors contributing to the shortage.

Among European companies affected is Volvo Car. Its plant in Ghent, Belgium will not run for three days next week due to chip shortages, with some 5,000 workers being temporarily unemployed, the De Tijd newspaper reported, citing a company spokesman. The plant had shut for five days in the first half for similar reasons.

Dr Ploss called for more efforts in Europe to reduce the continent's dependence on foreign exporters in the semiconductor business. He is open to cooperating with other companies as long as it fits Infineon's business strategy, he said.

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