When losing sales due to a supply chain shock, leading companies rapidly redesign existing products to minimize or eliminate their exposure to the component shortage. Short-term solutionsĭesign for availability. Here are some of the emerging best practices. ![]() The leading companies are taking a two-pronged approach that makes bold investments to address short-term supply disruptions and set themselves up for long-term resilience. Given that the chip shortage will linger for the foreseeable future-and the devastating war in Ukraine and Covid-19 surges could cause further uncertainty and supply disruptions-many companies are moving beyond table-stakes response tactics and building a flexible, forward-looking semiconductor supply strategy. The bleeding-edge chips reliant on these substrates make up nearly 50% of the semiconductors used in servers and more than half those used in gaming consoles. These suppliers lack the financial resources to build their substrate factories fast enough to meet rising demand. Why? As demand for these products has jumped during the Covid-19 pandemic, the supply of “bleeding-edge” wafers has kept up, but production of the accompanying advanced substrate components has not. On the other end of the spectrum, we expect shortages to hamper several sectors through 2024, including gaming consoles and computer servers. ![]() These products depend on the 6-inch, 8-inch, and 12-inch wafers whose supply is increasing, and they also use other types of semiconductors that have been more widely available. ![]() Consumer electronics, including smartphones and tablets, will also rebound from the chip shortage over the next year or so.
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