JPMorgan explained how the global chip shortage will continue till 2022 and also described the two positive spots that might happen eventually in the next year.
FREMONT, CA: A top semiconductor analyst at JPMorgan told CNBC that the global chip shortage will continue till 2022, however as more supplies become available the situation might turn out to improve by mid-year. Investors are recommended by the U.S. investment bank to pursue longer-term trends in the semiconductor space in areas like high-end computing globally and also less-advanced technologies in China. Production across several industries, ranging from cars to consumer appliances, personal computers, and smartphones, are also affected by the supply crunch of the chips. Although JPMorgan is less bearish, some analysts and investors are expecting the shortage to last through to 2023. Regarding this anticipation of supply shortages to continue till 2023 was informed by Gokul Hariharan, co-head of Asia-Pacific technology, media, and telecom research at JPMorgan, to CNBC.
However, he added the fact that 2022 cannot be predicted that easily as it is a bit tricky as things can improve eventually in the second half of the year, in case additional supplies come online. Anyhow the first six months could still see a few shortcomings across the industry. Even the U.S. and European IDMs are expanding their volume; however, this is expected to not come online until after the mid-next year. He said that there are two trends that the investment bank is positively relying on for the next three to five years. Firstly, the high-end compute segments, which are now being fragmented as more companies are entering the space and the second one is Chinese semiconductor companies that focus on legacy, long-tail technologies. Moreover these companies produce a range of less advanced chips in sectors like microcontrollers, sensors, power management, and other consumer-related segments.