Flextronics: Chip shortage to last until at least mid of 2022

According to the Financial Times, the electronics manufacturing service provider Flextronics warned the industry that the chips shortage will continue for at least another year.

Flextronics, headquartered in Singapore, is a major customer of chip manufacturers. It has more than 100 factories in 30 countries around the world and produces electronic devices for many companies including Ford, Dyson, and HP.

Semiconductor manufacturers have postponed forecasts for when the shortage will end. Strong demand is expected to continue until mid to late 2022, but it also depends on the commodity situation.” said Lynn Torrel, Chief Purchasing Officer of Flextronics.

Revathi Advaithiyrcru, CEO of Flextronics, said that the devastation caused by the epidemic has made Flextronics’ multinational customers more seriously consider restructuring the supply chain than when they were affected by the trade war, which may include more regionalization.

“Most companies will not make regionalization decisions because of tariffs. They know that it is only a short-term impact, but the epidemic that impacts overall costs and higher transportation costs will drive regionalization,” she added.

Torrel said that if COVID-19 vaccination shifts consumer spending to the service industry and spends less on consumer electronics, the situation may improve. However, she warned that the recent lock down in Malaysia may have a great impact on the supply chain that is already under a lot of pressure.