The global chip shortage doesn't mean all semiconductor prices will shoot up equally, says Natixis chief economist

2 weeks ago 57

The planetary spot shortage is causing problems for aggregate industries and shows nary signs of abating, but don't expect prices for each types of chips to sprout up, says the Asia-Pacific main economist of probe steadfast Natixis.

Car makers person been deed hardest by the shortage, but the situation affects everything from gaming consoles to televisions.

But not each industries oregon products whitethorn endure the aforesaid way. In fact, determination mightiness adjacent beryllium an oversupply of definite chips, according to Alicia Garcia-Herrero of Natixis.

"Those chips that for which I americium expecting overcapacity, are the benignant of lower-end chips," she told CNBC connected Thursday. "This is due to the fact that China is entering that portion of the proviso concatenation precise rapidly with immense investment."

In different words, Garcia-Herrero said connected "Squawk Box Asia," determination volition beryllium a segmentation of prices.

"The little extremity chips volition person plummeting prices, precise apt … But for the champion ones — those that truly are applicable for 5G and electrical vehicles — we want. So these volition person immoderate inflationary consequences," she said.

The ongoing shortage was partially driven by companies stockpiling arsenic the pandemic swept crossed the satellite and proviso fears grew. 

But geopolitics is playing a portion too.

Amid the tech contention betwixt some giants, the U.S. past twelvemonth placed restrictions connected China's biggest chipmaker Semiconductor Manufacturing International Corporation, barring it from getting precocious manufacturing gear, and making it harder to merchantability its finished products to companies with American ties. 

As a result, immoderate companies decided to stockpile indispensable chips up of those restrictions.

Garcia-Herrero said that those geopolitical risks volition not spell away. Both the U.S. authorities and the tech assemblage person pushed to boost the country's semiconductor manufacturing capabilities arsenic a hedge against this risk. While immoderate U.S. companies plan their ain chips, presently the immense majority of the world's chips are manufactured successful Taiwan, South Korea and China.

"This is the occupation that adds to the complications of the ostentation — that the astir invaluable portion of the proviso concatenation successful the U.S. is going to look a batch of geopolitical risks … and this is not going to change," she said.