The global supply crunch of semiconductors that has steamrolled automakers, data center owners, and electronics manufacturers by making them cut production and revenues, has turned into a “fight” that risks dragging on until 2023, according to the Chief Executive Officer of Nokia Oyj.
“There’s a fight going on. The shortage in general in the market could continue a year or even two,” Nokia CEO, Pekka Lundmark, said in an interview on Thursday, according to Bloomberg. “This is not going to go away anytime soon.”
“It would be naive for anyone to say that this would not be a serious shortage.”
With every company that uses chips in production panic buying to shore up stocks, the shortage has squeezed capacity and driven up prices.
Nokia and Ericsson AB, the network equipment makers, are usually some of the biggest consumers of semiconductors and the shortages caused by the supply crunch have stirred concern of a delay to their multi-billion dollar rollout of fifth-generation mobile networks.
That would complicate Lundmark’s efforts to get Nokia back in the 5G game after an early stumble that handed an advantage to Ericsson.
Companies from California-based Apple Inc. to South Korean tech giant Samsung Electronics Co. and Japanese automaker Honda Motor Co. have flagged the chip supply shortage. Nokia, which on Thursday posted better-than-expected quarterly results, is spending growing amounts of time trying to address the problem, though the impact on the company’s operations is “not material” for now, said Lundmark.
“You have to be in daily contact with your suppliers, make sure you are important to them,” he said later in an interview with Anna Edwards on Bloomberg TV. “It is things like how important you are in the big picture, how strong your relationships are, and how you manage expectations.”
Ericsson informed last week that the scant supply has not yet impacted deliveries to customers.