Cisco expects chip shortage to last at least another six months

Chuck Robbins says the situation is bound to improve over the “next 12 to 18 months”

The global semiconductor shortage will last for at least another six months, according to Cisco CEO Chuck Robbins.

Robbins told the BBC that it would take “another six months to get through the short term” of the global chip shortage, adding that the crisis is unlikely to be fully resolved until 2022.

"The providers are building out more capacity. And that'll get better and better over the next 12 to 18 months,” he said.

According to Robbins, the shortage has been caused by unprecedented demand for semiconductors, which “go in virtually everything”.

“When COVID hit, everyone thought that the demand side was going to decline significantly and in fact we saw the opposite,” Robbins said. “And at the same time demand went up instead which was a complete shock to so many of us.”

The UK’s first national lockdown saw a massive surge in demand for virtual office components such as laptops and network peripherals as companies scrambled to accommodate their employees in the mass shift to working from home

Robbins’ statement comes as the European Commissioner for Internal Market Thierry Breton announced plans to hold discussions with Intel CEO Pat Gelsinger and TSMC Europe president Maria Marced on 30 April.

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Breton is reportedly looking to secure the EU’s role in chip production by persuading a leading chip manufacturer, most likely TSMC, to open a fabrication plant in the region, with France, Germany, or Poland mentioned as potential locations.

Opening a major factory in Europe would help the continent to become less reliant on shipments coming in from Asia, which has proven increasingly difficult due to pandemic travel and transport restrictions. Breton is seeking to double the EU’s share of global semiconductor production to 20% by 2030.

"Increasing our autonomy does not mean isolating ourselves in a world where supply chains are global," Breton told Reuters. "In parallel to exploring how we can increase Europe's capacity...we will continue to build bridges with international partners - but with us in the driving seat," he added, confirming the meetings.

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