The worst could quickly be over in relation to disruptions stemming from the worldwide chip scarcity, in response to Goldman Sachs.
Andrew Tilton, chief Asia economist on the financial institution, stated the scenario might enhance within the second half of 2021.
He stated there have been “noticeable tightening” of provide chains and cargo delays in North Asian economies corresponding to Japan, Taiwan and South Korea, that are concerned within the semiconductor provide chain.
“That will have an impact on downstream sectors. Auto production is one of those,” he advised CNBC’s “Street Signs Asia” on Monday.
“Our analysts believe we’re probably in the worst period of that right now. That is, we’re seeing the biggest disruption downstream (in) industries like auto right now and that will gradually ease over the back half of the year,” Tilton stated.
Concerns in Taiwan
Still, Goldman’s Tilton stated the scenario is price monitoring, particularly if different disruptions within the provide chain emerge.
“There was a lot of concern in Taiwan that droughts or the resurgence of a new Covid outbreak there could result in a significant shortfall in production. So far we haven’t seen that,” he stated.
There’ve been a few remoted disruptions, however to date, not sufficient to trigger a serious disruption to the semi provide chain.
Andrew Tilton
Goldman Sachs chief Asia economist
Chip manufacturing crops use big quantities of water every day, and Taiwan, dwelling to the world’s largest contract chipmaker, is facing its worst water shortage in 56 years. On Sunday, the island lifted some water restrictions after a recent bout of heavy rain, Reuters reported.
Taiwan can be coping with a Covid outbreak that emerged in May after it efficiently saved the virus at bay for a lot of the pandemic.
“There’ve been a couple of isolated disruptions, but so far, not enough to cause a major disruption to the semi supply chain,” Tilton stated.
It stays one thing that must be watched carefully within the coming weeks and months, he added.
