Incoming Qualcomm CEO Cristiano Amon has warned that a global chip shortage caused by the effects of the coronavirus pandemic may not ease until the end of 2021.
As Covid-19 spread across the globe, governments enacted lockdown restrictions and social distancing measures that had an inevitable impact on demand for consumer electronics, including smartphones.
Many people delayed or abandoned purchases because of economic concerns or because they were physically unable to go to a store. As a result, vendors reduced their orders and manufacturing was scaled down.
Qualcomm chip shortage
However, demand has rebounded far more quickly than the industry expected, affecting not just the manufacturing of smartphones, but also cars, games consoles and many other products.
Recent research from Gartner says the pandemic has strengthened sales for many products, while the widespread adoption of cloud computing services for work and education meant there was a greater need for data centre technology.
Overall, the top ten semiconductor consumers increased their spend by ten per cent during the year and increased their share from 40.9% of the market to 42%.
In an interview with CNET, Amon said the shortage meant Qualcomm was struggling to secure enough chips to meet the demands of smartphone customers that want to integrate the company’s technology into its handsets.
This, he said, was the biggest challenge he faced as he prepares to take control of the industry’s most influential chip designer at a time when it is hoped 5G will stimulate the smartphone market.
“If you asked me, ‘what keeps me up at night?’ right now [it] is this supply chain crisis we’re having in the semiconductor industry,” he is quoted as saying.
While Amon expects the situation to improve before the end of the year, he has suggested that the industry learn the lessons from the episode and invest in manufacturing capabilities that would help with any future crises.
Amon will replace the retiring Steve Mollenkopf in June having joined the company as an engineer back in 1995.
As president, the 50 year-old Amon is responsible for Qualcomm’s semiconductor business and has been instrumental in the development of its 5G technical roadmap and strategy.
5G networks will power a wide variety of devices beyond smartphones and support new business, industrial and Internet of Things (IoT) applications. This increased scope is a huge opportunity for Qualcomm.