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I am beginning to experience multi month back orders on Lexmark and Ricoh product in Canada?

It is well documented that the global chip shortage caused by the recent boom in consumer electronic  sales to the home office and entertainment devices surprised computer chip manufacturers who are currently unable to keep up with demand.  These manufacturers were expecting a decline in chip demand and built up little inventory.

The shortages are having a big negative impact on automobile production.

Is the same happening to MFPs and printers?

Last edited by SalesServiceGuy
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Worldwide chip shortage expected to last into next year



A global shortage of semiconductors has pushed chip stocks to record highs, and analysts expect that chips will continue to be in short supply at least through the end of the year as COVID-19 pushes the world further into the digital realm and the industry struggles to keep up with demand.Analysts believe there could be more gains ahead, though, as demand sends prices higher and boosts companies throughout the semiconductor space.

The cause seems to be a combination of increased demand as people scooped up electronics during the COVID-19 pandemic, limited manufacturing capacity to meet that demand, and the U.S.-China trade war.

Even as stock fundamentals appear stretched thin, Sur said “we believe semi companies are shipping 10% to 30% BELOW current demand levels and it will take at least 3-4 quarters for supply to catch up with demand and then another 1-2 quarters for inventories at customers/distribution channels to be replenished back to normal levels.”

“We’ve heard from countless component suppliers and distributors about elevated book-to-bill levels and growing backlog, typically a ‘double-ordering’ red
flag,”

... a quick look inside any copier will reveal many microchips and processors that are required to make the product work.  A shortage of one $0.25 chip prevents a critical board from being produced and a copier from being assembled.

Factors affecting supply.

1). Chinese fab factories that are on the US entity list.  US manufacturers who used to buy from them are forced to move to other places and this causes supply issues.

2). Chinese customers who are anxious about getting blocked from purchasing US components are building up inventory.

3). COVID concerns are causing rolling outages in supply.

4). Current fab manufacturing capacity running at 100%+.

5). The temporary weather disruption in Texas where Texas Instruments and other companies manufacture semiconductors did not help.

6). The semiconductor supply chain for automobiles is almost empty.

7). Changes in consumer behaviour due to COVID-19.  People were not able to spend money on restaurants, travel or vacations.  They used that money to upgrade their home office and entertainment electronics.

Many A3 copier manufacturers are located in China.  Presumably they can still purchase semiconductor chips manufactured in China.

Last edited by SalesServiceGuy

President Biden has been focussed on COVID-19 relief, jobs, rebuilding an economy in disarray and getting his Cabinet nominees in place during his first month in office.  Semiconductor supply is not near to being a top priority.

Having said that President Biden is expected to sign an executive order in the next few weeks that would call for a comprehensive review of the semiconductor supply chain.  The White House is expected to consider incentives to bring manufacturing of semiconductors back to the USA in a process referred to as "on-shoring", bringing manufacturing back to the USA.

Unfortunately, it takes years and billions of US$ to bring a new fab plant online.

China remains an aggressive competitor to the USA that condones the theft of US intellectual property, abuses human rights, uses its military to threaten its neighbours and destroys the environment.  I would not expect a thaw in US China relations anytime soon.

Last edited by SalesServiceGuy

Approx 10-12% of global microchips are manufactured in the USA.

Apple is incredibly reliant on one fab factory from a company called TSMC based in Taiwan that is vulnerable to missile attack from China.

TSMC and Samsung have announced plans to build new fab buildings in the USA but it will take years before finished product can be shipped.

The US high tech defence industry is heavily reliant on a steady stream of microchip processors to build it's products.

President Joe Biden signed an executive order Wednesday meant to address a global chip shortage impacting industries ranging from medical supplies to electric vehicles.

The order includes a 100-day review of key products including semiconductors and advanced batteries used in electric vehicles, followed by a broader, long-term review of six sectors of the economy. The long-term review will allow for policy recommendations to strengthen supply chains, with the goal of quickly implementing the suggestions, Biden said at a press event Wednesday before he signed the order.

The action follows calls from bipartisan members of Congress and industry leaders warning about the potential consequences of the shortage. Commonly known as chips, semiconductors are used to power electronics including phones, electric vehicles and even some medical supplies. Senate Majority Leader Chuck Schumer, D-N.Y., said that “semiconductor manufacturing is a dangerous weak spot in our economy and in our national security.”

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