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Chipmaker AT&S expects shortages to last another 12 months

Chipmaker AT&S expects shortages to last another 12 months
By Reuters
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KUALA LUMPUR - Austria-based chipmaker AT&S sees the global chip shortage taking at least another year to stabilise and for production capacities to cover demand, its chief executive said on Thursday.

Chief Executive Officer Andreas Gerstenmayer said the situation was a "very dynamic volatile environment". In the company's view, it will at least take another 12 months to stabilise and bring up capacities.

"We are now in a very volatile environment that is completely destabilised and this needs to be re-stabilised, and the capacities need to be added to the market," he said during a briefing.

The manufacturer is setting up a plant in Malaysia that will begin construction next month, and start production towards the end of 2024. It plans to invest 8.5 billion ringgit ($2.05 billion).

Malaysia's chip assembly industry, accounting for more than a tenth of a global trade worth over $20 billion, has warned that shortages - exacerbated by years of under-investment in basic chip production, while high-end semiconductors were favoured - will last at least two years.

Gerstenmayer said the shortage was not solely caused by the COVID-19 pandemic as there were already uncertainties from 2019 that caused the industry to miss an investment cycle.

"Then COVID came and with a very sharp downturn, the global supply chain was completely cleaned up. Everyone was very cautious, uncertain, and everyone tried to reduce the capacities they had," he said.

($1 = 4.1480 ringgit)

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