Global Chip Hunger Is Showing Early Signs of Indigestion

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This is a worry. More than half of the company’s revenue comes from its two most-advanced production nodes. And as a general rule, the newer the technology, the shorter the shelf life: Clients who require the latest and greatest chips need to keep upgrading. But global bottlenecks are forcing customers to put in bigger orders than normal to avoid being caught short if logistical hiccups result in fresh supplies being unable to reach their destination. There are many sectors where products can be stockpiled without much risk, such as coal, grains, and even older electronics components. At the leading edge of the chip sector though, products can become redundant within a half-year and clients know it. If any of them start to see end-demand falter, then there’s a high likelihood they’ll sharply cut orders so they can digest the stockpiles they’ve already built. 

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