IDC: Chip Supply May Reach Overcapacity by 2023

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Since late 2019 the chip shortage has been one of the main issues that have been affecting the world. The chip supply shortage has been a result of a lot of factors such as the struggles in manufacturing, the sudden rise of crypto mining, and the COVID-19 pandemic.

Now a prediction from the International Data Corporation (IDC) has been reported, saying that the chip industry might reach normalization before 2022 ends and see a potential overcapacity by 2023.

“The industry will see normalization and balance by the middle of 2022, with a potential for overcapacity in 2023 as larger-scale capacity expansions begin to come online towards the end of 2022,” IDC said.

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The IDC also reported that the growth is driven by mobile phones, notebooks, servers, smart home devices, gaming devices, wearables, and Wi-Fi access points, with increased memory pricing. Industry chip shortages are also being mitigated this Q4 2021 as capacity additions are being accelerated.

“The semiconductor content story is intact and not only does it benefit the semiconductor companies, but the unit volume growth in many of the markets that they serve will also continue to drive very good growth for the semiconductor market,” says Mario Morales, Group Vice President, Enabling Technologies and Semiconductors at IDC.

The big question still remains though on which sectors will receive the most benefit from the boost of the industry chip supply. As of now, PC parts, mainly, graphics cards along with game consoles, and other personal gadgets are hit the hardest. 

The IDC did not give any statement about the question but stated that dedicated foundries have assured that suppliers are getting the products that they need. 

“IDC reports that dedicated foundries have been allocated for the rest of the year, with capacity utilization at nearly 100%. Front-end capacity remains tight but fabless suppliers are getting the production they need from their foundry partner.” IDC said.

Source 1, 2 | Featured image

Started his freelancing adventure in 2018 and began doing freelance Audio Engineering work and then started freelance writing a few years later.

Currently he writes for Gadget Pilipinas and Grit.PH.

He is also a musician, foody, gamer, and PC enthusiast.

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