Analyst firm states global chip shortage may turn into oversupply by 2023

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While a global chip shortage is causing significant supply issues for electronic components of all kinds, one analyst firm has said the industry will potentially reach more capacity by 2023.

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International Data Corporation (IDC) has said that despite the severe chip shortages this year, the industry will return to normal “by the middle of 2022” and potentially become over-saturated in 2023 (thanks, register)

The report said that although demand for semiconductors will continue, the associated shortage should “continue to ease” as capacity additions “accelerate” by the end of 2021.

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Fully dedicated foundries for the production of these chips have been allotted till 2021 and almost 100 per cent production capacity is being utilised. Although “front-end capacity remains tight”, IDC notes that “fabless suppliers are getting the production they need from their foundry partners”.

Front-end providers are apparently already starting to meet demand, although this does not mean an immediate solution to the shortage as “larger issues and shortages will remain in back-end manufacturing and materials”.

Semiconductor shortages have led to a significant shortage of current-generation gaming consoles, as well as graphics cards and even cars. While IDC has said the situation is improving, signs of the German GPU market suggest that graphics cards – which have been particularly hit by chip shortages – are going to be more expensive and even harder to find.

Last month, STMicro CEO Jean-Marc Cherry said that “things will gradually improve in 2023”, adding that normal product availability will not return “before the first half of 2023”. Similarly, Toshiba has warned that the shortage in gaming consoles will last at least until 2022, and in some cases even 2023.

In other news, EA has acquired Playdemic – the studio behind golf clash – for over £1 billion in a major cash deal. EA CEO Andrew Wilson said the acquisition “not only adds to the strength of our mobile teams globally, it also continues our expansion and investment in UK-based talent”.

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