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Shortages will continue all of 2021 and into 2022.

Shortages will continue all of 2021 and into 2022.


Key Facts About Shortages

When will shortages end

The end date for shortages is a mystery, but you can form a general idea of what to expect based on recent announcements by major corporations.

Sony expects supply of its wildly popular PlayStation 5 will remain low all the way through 2022.

Samsung expects its shortage in home appliances will extend into the second half of this year. Originally, it thought supply would improve in the first quarter, said Reuters.

The largest semiconductor producer on the planet is TSMC of Taiwan (it even makes some chips for Intel).  The company told 60 Minutes a few weeks ago that it will catch up with supply by the end of June, but it would take another 7 or 8 months for the chips to work their way through the supply pipeline (so early next year).

Shortages were the theme of a recent seminar sponsored by bluesalve partners, which expects shortages impacting home electronics and other markets to continue for the next 12 months.

“You may hear that the [chip] situation will ease. But in reality, it depends where you are in the food chain,” said Co-Partner of bluesalve Robert Heiblim. “The larger companies may see some easing in the fall.  If you are a smaller company and use the same chip sets, relief isn’t going to come any time soon.”

Bluesalve partners Avi Rosenthal (l) and Robert Heiblim

AKM is still six months or more from any sort of recovery, he added. And as AKM made many of the DSP chips for the home and car audio industry, “It’s chaos in the market in terms of [DSP] price and availability,” said Heiblim, who has held executive posts at Denon, Altec Lansing and Gemini Industries.

“AKM made a great product, most people were satisfied with them.” But since the fire, “We’re seeing our clients redesign things…AKM proved to us that you can design things quicker than you think.  There’s a lot of engineering talent out there. And believe it or not, it doesn’t take as long as people think to pull out one DSP and put in another DSP and re-spin a design,” said Bluesalve Co-Partner Avi Rosenthal.

He’s seeing the same quick redesigns around microprocessors, also in short supply and high demand.

LCD panels have also been in short supply.  “Only a few companies make them. The good news is none have burned down,” quipped Rosenthal, adding that availability of smaller panels are easing.  The wait time for smaller OLED LCDs was 24 weeks and has come down to a 12 week lead, he said.

Bluesalve advises that suppliers prioritize which products they are going to produce since they may not have the parts to manufacture them all. And that may mean sacrificing the lower end products in your line.  Heiblim says to expect to see mainly super large screen sizes in TVs this Christmas because that’s where the suppliers can make bigger profits.

“We’re going to live in this chaotic world for at least the next 12 months. And the question is, three years from now will you be prepared for the next chaotic market?  There’s always going to be a boat stuck in the Suez Canal, and drought in Taiwan and a freeze in Texas.  They may not come all at once as in 2020, but there will always be something that affects your supply line,” concluded bluesalve.

Regarding the cost of goods, bluesalve said the following:

There’s a 64 percent increase in prices of aluminum compared to before the pandemic.

Steel is up 140 percent.

Copper is up over 90 percent from last April. It’s used in wiring, cable and some components.

ABS plastic is up about 50 percent.

The lead times for parts have increased by 20 to 100 percent.  For a small to medium sized company purchasing processors, the lead time is 42 weeks (it is less for a bigger company with deeper pockets).

It’s now taking upwards of 20 days for a ship to clear the ports, especially on the West Coast, where previously it required a wait of only 5 to 7 days.

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