The global chip shortage disrupting the car industry and threatening the supply of consumer technology products will last for at least another year, one of the world’s largest electronics contract manufacturers has warned. The forecast from Flex, the world’s third-biggest such manufacturer, is one of the gloomiest yet for a crisis that is forcing car and consumer electronics groups to re-examine their global supply chains. A rapid rebound in vehicle sales combined with a lockdown-driven boom in games consoles, laptops and televisions has left the world’s chipmakers overwhelmed by the sharp increase in demand.
Singapore-based Flex has more than 100 sites in 30 countries and manufactures devices and electronics for companies including Ford, British household appliances designer Dyson, UK online grocer Ocado and US computer and printer maker HP. Its position in the supply chain makes it a large buyer of chips. Lynn Torrel, Flex’s chief procurement and supply chain officer, said that the manufacturers it relies on for semiconductors have pushed back their forecasts for when the shortage will end. “With such strong demand, the expectation is mid to late-2022 depending on the commodity. Some are expecting [shortages to continue] into 2023,” she said.
The forecast from Flex, which sits at the heart of the supply chains for the car, medical devices and consumer electronics industries, follows a bruising six months during which shortages have forced car companies to scale back production and furlough staff.
The issue has led many companies to adopt a more assertive approach to sourcing, such as paying for chips in advance. Tesla, the US electric-car maker, has explored buying a chip plant outright.
Electronics manufacturers in Asia have shortage was beginning to spread to TVs, The potential disruption of and home appliances, with the situation made worse by Chinese groups hit by sanctions.