Home Innovations Semiconductor Shortage Required More 6 Months, Says Cisco CEO

Semiconductor Shortage Required More 6 Months, Says Cisco CEO

Chuck Robbins looks back on the semiconductor shortage, announcing that the next six months will be tough again. Cisco CEO Chuck Robbins told the BBC he expects the global chip shortage to impact global supply chains for another six months.
“We think we still have six months to get through the short term,” he says. “Suppliers are further developing their capabilities. And it will get better and better over the next 12-18 months. "

A disconnect between predictions and reality

In this interview, the CEO of Cisco discusses the reasons for the shortage, and explains that there has been a disconnection between the expected consumption of semiconductors and reality during the Covid-19 pandemic.
“Semiconductors are used in the manufacture of almost everything. And what happened was when the Covid hit, we all thought the demand was going to drop significantly. Except that in the end, the opposite happened,” he says. “We've actually seen demand increase.”
According to Chuck Robbins, what happened was that all manufacturers, like Cisco, sent signals of declining demand to suppliers, who then reduced their capacity? But instead, the demand has increased. “Which was a total shock to a lot of us,” he reports.
The situation is exacerbated, he explains, because there is now a very high demand in the system.

A shortage that affects many sectors

Earlier this month, chipmaker Taiwan Semiconductor Manufacturing Company (TSMC) said it said the shortage would continue until 2022.
Likewise, AMD predicted disruption in the industry a few months ago for some time to come.
Disruptions in the semiconductor supply chain have affected many tech companies, but the impact has been felt in other industries as well. Intel CEO Pat Gelsinger said earlier this month that his company was in talks with semiconductor manufacturers to fill the silicon shortage that is blocking production of new vehicles.

International tensions

Among the explanations for this shortage, we can also cite international relations, whether it is the trade war between the United States and China, or the demands of each country to produce more locally.
As such, US President Joe Biden signed an executive order in February aimed at remedying the semiconductor shortage. He wants Congress to authorize $ 37 billion for the United States to supply automakers. The executive order comes after major chipmakers - including Intel, IBM, Broadcom, Qualcomm, Nvidia and AMD - pressured the president to support the U.S. chip industry as part of his stimulus package 2,000 billion dollars.
The Financial Times reported this weekend that the global chip shortage is spreading to manufacturers of smartphones, TVs and home appliances, with Samsung Electronics and LG Electronics being among the groups feeling the manufacturing delays that are expected to last until in 2022.