Chip shortage risks becoming a glut in 2023 as fabs scramble to add capacity, say analysts

There is potential for overcapacity in 2023 as larger-scale fab expansions come online towards the end of 2022, according to IDC Research. The semiconductor industry is highly cyclical, running through a peak-to-trough cycle every four to six years. — SCMP

As semiconductor foundries scramble to add capacity to meet soaring demand amid a protracted chip shortage, some experts are warning that the demand-supply equilibrium will be reached in 2023, possibly leading to a supply glut down the road.

“Our view is that when we come to 2023, there will be sufficient supply to come back into some degree of balance, or maybe even overcapacity,” Gokul Hariharan, co-head of Asia-Pacific TMT Research at US investment bank J.P. Morgan, said in an interview with the Post, adding that it was too early to predict when the glut would occur.