STMicro CEO does not anticipate an end of the chip shortage before the first half of 2023

by Mathieu Rosemain

PARIS (Reuters) – The global semiconductor shortage affecting the production forecasts of multinationals like Apple and Volkswagen is expected to last until the first half of 2023, the CEO of STMicroelectronics said Thursday.

“Things will improve gradually in 2022, but we will return to a normal situation (…) not before the first half of 2023,” Jean-Marc Chery said in an interview with Reuters.

By “normal situation,” he said, he meant a return to regular levels of conventional chip inventories and three-month component replenishment lead times.

The shortage, which stems from a surge in demand from a wide range of industries, is fueling price hikes, said Jean-Marc Chery, who has headed STMicro since 2018. The uptrend will continue in the second half of 2021 and into 2022, he said.

“It’s not like in the past years when we expected Microsoft and its new version of OS that would call on many more PCs,” he added. “There we have a global mainstream (…) with a massive call for components”.

The boss of the Franco-Italian group said that the average price of chips produced by it had increased at an annual rate of 5% in 2021.

STMicro will only be able to meet 70% of the total demand of its customers this year, said Jean-Marc Chery, adding that investments in production capacities would allow next year to bring this level to 85% -90% of the request.

Earlier today, the group revised upward its sales guidance for the full year, posting strong quarterly results amid strong demand from automakers and smartphone makers.

(Report Mathieu Rosemain; French version Jean Terzian, edited by Sophie Louet)

Back to top button