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Semiconductor Lead Time worsens since the starting of the chip crisis indicating harder times ahead

The world is currently gripping by the semiconductor crisis and the shortage of materials have caused many plants to shut their operations, as well as the price for CPUs and GPUs in the market, have inflated.

Many expect that the chip shortage will be over soon, however, according to a recent report from Bloomberg the chip crisis will only keep worsening. The report claims that the Lead time has now increased. The definition of Lead time means the amount of time it takes for a customer, like an OEM or chip designer (like AMD or Nvidia), to receive their chip. This time has now increased to a whopping 20.2 weeks for more advanced semiconductors, and 26.5 weeks for microcontrollers and logic chips.

According to the Susquehanna Financial Group, which has been researching the semiconductor shortages, this is the longest wait time ever recorded since they started tracking data in 2017. This means that the semiconductor shortage condition is worsening in the market.

When the GPU prices started getting down and a decent amount of CPU stock was made available in the market we expected that the situation is improving. However if the lead times continue to get worse, then we could see yet another price hike for CPUs and GPUs in the coming future as the demand for high-end cards keeps intensifying daily.

However, there are still hopes as TSMC and other chip manufacturers have reported that they expect the chip shortage to be over by 2022 or 2023. And the reduction of prices in the market depends on the chip designers like AMD, Nvidia, and Apple ordering chips as early as possible to keep production rolling. And these are all big tech giants so expect them to keep the production rolling. But there is still a year or two of waiting to get the supply on a stable route.

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Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.

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