Cisco says computer chip shortage to last six months:
The semiconductor shortage is affecting firms from carmakers to smartphone manufacturers.
If you're not familiar with Cisco: "85% of internet traffic using Cisco's systems"
"expansion of capacity will be crucial as advances in technology - including 5G, cloud computing, the internet of things and artificial intelligence - drive a big increase in demand"
"shortages … exacerbated by companies over ordering components to build up inventory, afraid of being caught short again"
Boom & Bust cycles
Chip supply has gone thru cycles for at least the past 30 years. 2019 was probably the worst year for chip makers this century, as demand fell for PCs, phones, cars and other products.
Main problem is chip factories are hugely expensive to bring online, probably over $10 billion these days. So when demand rises, it takes a couple of years before supply can catch up. Then demand plateaus or drops, and those old and new supply players are caught with excess capacity—which means their super-expensive resources are not working full-tilt anymore.
This causes their investors to get nervous, share prices drop, finance becomes more expensive, etc. Some players are forced to shut down factories, smaller ones probably go out of business. Then, guess what… Yeah, demand rises again a few years later, and the whole mess repeats itself.
Times of over-supply are good for us consumers, as prices drop. Things are bad for us now of course in this time of under-supply.
The above boom and bust, plus the massive rise in setup costs, has reduced the number of chip makers from over a hundred in the last quarter of the 20th century to just 3 now—Intel, Samsung, TSMC. Three is too few for such a crucial resource, so hopefully plans for home-based manufacturers in US and EU will come to fruition this decade.