Of all the component shortages we’ve seen in recent years, by far the most severe has been for certain semiconductor chips.

Global semiconductor shortages are not ending yet, but there are some mixed signals ahead for 2023. Based on market data and conversations with our customers, we expect the market for components like analog, microcontrollers, FPGA and discretes to be constrained well into 2023; lead times for basic semiconductors still extend past 40 weeks, on average, and high-end components are in excess of 52 weeks.

However, we anticipate some relief could come in the back half of 2023. As the global economy has cooled down, demand in consumer markets has softened significantly — allowing suppliers to fulfill orders from other markets and begin clearing component backlogs. Combined, these factors spurred Gartner to project that the global semiconductor revenue will decline 3.6% in 2023.

Still, a few segments are still fueling high demand for specific chips: the Internet of Things (IoT), 5G and automotive, especially the electrification of the automotive industry. Now, instead of managing shortages in every area, chip suppliers are monitoring and reviewing their inventories to ensure they have the right product mix to meet demand where it’s peaking and avoid potential excess of chips from industries where demand is falling.

Read more in the article here.