Moody’s Analytics said in a report that the shortage of semiconductor chips that go into various items will normalise sometime next year while the lead times continue at a higher level.
“While we see lead times remaining elevated through the end of the year, we expect the chip shortages to normalise sometime in 2023,” said Moody’s Analytics economist, Tim Uy.
“One of the best metrics for assessing supply-chain stress has been semiconductor chip lead times — the time it takes for a microchip that is produced to reach the end consumer — as semiconductor chips are the oil of the digital economy, said Uy.
According to Moody’s Analytics, last month was the first time since the start of the pandemic that the lead time fell from 27.1 weeks to 27 weeks.
“While the decline is notable given the upward trend in lead times in the past couple of years, 27 weeks is still far from the norm, and we expect lead times to remain elevated going into 2023,” said Uy.
“Chips are the foundation of modern electronic devices, and as technology advances, so does the demand for chips,” he said, adding that electric cars can use 10 times the number of chips required for older cars and also require more advanced microchips.
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