Cisco boss expects global chip shortage to continue another six months

Chuck Robbins has told BBC in an interview the global chip crunch came as a shock to the industry.

Cisco CEO Chuck Robbins has told the BBC he expects the global chip shortage to be impacting global supply chains for another six months.

"We think we've got another six months to get through the short term," he said. "The providers are building out more capacity. And that'll get better and better over the next 12 to 18 months."

In an interview with the network, Robbins said there was a disconnect between semiconductor expected consumption and reality during COVID-19.

"Semiconductors go in virtually everything, and what happened was when COVID hit, everyone thought the demand side was going to decline significantly and in fact we saw the opposite," he said.

"We saw the demand side increase".

What happened, Robbins said, was all of the manufacturers, like Cisco, sent lower demand signals to the providers, who then reduced their capacity. Demand went up instead.

"Which was a complete shock to so many of us," he said.

This is exacerbated, he said, because there is now so much demand in the system.

Contract chip maker Taiwan Semiconductor Manufacturing Company (TSMC) said earlier this month it expects chip supply shortages to continue through 2022. Similarly, AMD is expecting the shortage to impact the industry for a while longer.

Supply-chain disruptions in semiconductors have impacted many tech firms, but the impact has also been felt across other sectors, with Intel CEO Pat Gelsinger saying earlier this month his company was in talks with semiconductor manufacturers to fill the silicon shortage that has stalled the production of new vehicles.

US-China relations, and demands by each country for greater local capacity in chip production, is also hurting supply.

In February, US President Joe Biden signed an executive order that aimed to address the semiconductor chip shortage. The President wants Congress to authorise $37 billion to ensure the US can supply auto makers. 

The same month, major chip manufacturers including Intel, IBM, Broadcom, Qualcomm, Nvidia, and AMD, lobbied Biden to support America's chip industry as part of his $2 trillion recovery plan. 

The Financial Times over the weekend reported the global chip shortage is spreading to makers of smartphones, televisions, and home appliances, with Samsung Electronics and LG Electronics among the groups feeling the pinch from manufacturing delays that are forecast to last into 2022.