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  • Post published:01/11/2021
  • Post last modified:01/11/2021
Cartoon hands offer up wads of cash to another cartoon hand holding a computer chip.
Enlarge / Don’t expect cheaper chips anytime soon.
Tommy/Getty Images

The semiconductor chip shortage that has so vexed the auto industry looks set to continue for quite some time, according to a new industry survey. More than half of the companies that were surveyed by IPC said they expected the shortage to last until at least the second half of 2022. And right now, the chip shortage is being exacerbated by rising costs and a shortage of workers.

According to the survey, 80 percent of chip makers say that it’s become hard to find workers who have to be specially trained to handle the highly toxic compounds used in semiconductor manufacturing. The problem is worse in North America and in Asia, where more companies are reporting rising labor costs compared to those in Europe.

But only a third of Asian chip makers say they are finding it harder to find qualified workers, compared to 67 percent of North American companies and 63 percent of European companies. That may well explain why fewer Asian semiconductor companies (42 percent) are reporting increasing order backlogs, compared to 65 percent of North American and 60 percent of European companies.

Just under half (46 percent) said they were retraining their current workers to fill the gaps, and nearly as many (44 percent) said they were increasing wages to make the jobs more attractive. Other popular measures include more flexible hours and more training opportunities for workers.

Even more of the companies surveyed said that rising material costs were a problem, too—90 percent globally, with nearly as many suggesting that trend will continue for another six months at least. IPC says that chip makers’ profit margins are shrinking as a result.

That’s probably already being felt by some of their customers. According to a report by AlixPartners, the auto industry will lose out on $210 billion in revenue in 2021, forecasting a shortfall in production of 7.7 million vehicles worldwide. That’s got the US government’s attention, too. On Thursday, Commerce Secretary Gina Raimondo is meeting automakers and tech firms, as well as semiconductor companies, to see if the federal government can help.

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