Labor Crunch Top of Mind, as Chip Woes Seen Dragging to Year-End: IDC

The latest COVID-19 surges further exacerbated the chip crunch, but labor shortages are a bigger concern, said IDC Thursday. Uneven shortages and tight supply will drag on through 2022's first half as the industry builds up inventory to more normalized levels, it said. Automotive chip shortages have driven up the average selling price of vehicles, but supply should gradually improve through the second half, said analyst Nina Turner. The automotive market will begin to improve toward the end of this year and into 2023 “if there are no other supply chain shocks,” she said. Mature process nodes at 40 nanometers not only hit the automotive semiconductor market hard but also LCD drivers, power management ICs, power, auto ICs and microcontrollers, IDC said. The research firm estimates two-thirds of semiconductors were manufactured at mature process nodes in 2021 using largely depreciated assets that resulted in lower average selling prices compared with leading edge process nodes 16nm or under. Semiconductors using leading edge manufacturing are 15% of the semiconductor wafer volume, 44% of the revenue, leading companies to focus capital spending on that segment of the foundry market with only limited investment in mature process technology manufacturing, said the company.