IBM: Global chip shortage could last two more years

The IBM president's predictions are much more conservative than those of Cisco CEO Chuck Robbins

The issues affecting the computer chip industry, and by extension supply chains in many other sectors, could last until 2023, says IBM president Jim Whitehurst.

Speaking to the BBC, Whitehurt said the tech industry is "struggling" to match supply to the demand caused by reopening global markets.

Chip shortages have been ongoing for months now, starting when the pandemic hit early last year. Many fabs closed or temporarily stopped production as industry leaders expected demand to fall; however, the rise in people's free time and fast shift to home working caused a massive spike in demand for consumer electronics.

Even when fabs began to reopen, the chip industry has a long lead time between production starting and components being available at scale.

Those issues have been compounded by other problems, including water shortages in Taiwan, a fire in Japan and the unseasonable snow storm in Texas.

"[F]rankly, we are looking at couple of years…before we get enough incremental capacity online to alleviate all aspects of the chip shortage," said Whitehurst.

"We're going to have to look at reusing, extending the life of certain types of computing technologies, as well as accelerating investment in these [fabs], to be able to as quickly as possible get more capacity online."

His predictions are significantly more conservative than those of Cisco CEO Chuck Robbins, who expects production to be largely back to normal within six months.

IBM is not the only tech giant that's looking at ways to reinvigorate chip production.

Earlier this year, Intel announced a $200 billion investment in new factories across the USA and Europe, and this month earmarked another $3.5 billion to expand its 'Foveros' chip-stacking technology.

Meanwhile, there are rumours that Amazon is looking to bring chip production in-house, so it's less reliant on third-party suppliers like Broadcom and Mediatek.

On a national scale, South Korea has been offering tax breaks to local chip manufacturers like Samsung Electronics and SK Hynix, aiming to encourage investment in R&D.