“The semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021. Foundries are increasing wafer prices, and in turn, chip companies are increasing device prices,” said Kanishka Chauhan, principal research analyst at Gartner.

Gartner reckons the chip shortage started with devices made at 200mm wafer fabs, such as PMICs, display drivers and microcontrollers. There are now capacity constraints and shortages for substrates, wire bonding, passives, materials, and testing, all of which are parts of the supply chain beyond chip fabs.

Gartner said it expects the devices shortages to last until 2Q22 across most categories but said that substrate capacity constraints could extend to 4Q22.

Gartner provided a series of recommendations to chip buyers one of which was to join together with other chip customers and form unions to be able to approach chip suppliers and foundries with increased leverage. Another was to pre-pay for products or to invest in suppliers to try and gain guarantees of long-term supply.

Chip customers should also consider qualifying different sources of chips and/or chip packaging partners. 

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