The worst may be over soon when it comes to disruptions stemming from a global chip shortage, according to Goldman Sachs.
Andrew Tilton, the bank’s chief Asia economist, said the situation could improve in the second half of 2021.
He said there has been a “notable tightening” of supply chains and shipping delays in North Asian economies such as Japan, Taiwan and South Korea, which are involved in the semiconductor supply chain.
“That will have an impact on the downstream sectors. Car production is one of those, “he told CNBC’s” Street Signs Asia “on Monday.
“Our analysts believe that we are probably in the worst period of that at the moment. That is, we are seeing the biggest disruption in downstream industries like automotive at the moment and that will gradually decrease during the second half of the year, “he added. Tilton said.
Concerns in Taiwan
Still, Goldman’s Tilton said the situation is worth monitoring, especially if other supply chain disruptions arise.
“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 said.
Chip manufacturing plants use large amounts of water on a daily basis, and Taiwan, home to the world’s largest chipmaker, is facing its worst water shortage in 56 years. On Sunday, the island lifted some water restrictions after a recent episode of heavy rain, Reuters reported.
Taiwan is also grappling with a Covid outbreak that emerged in May after it managed to keep the virus at bay for most of the pandemic.
“There have been a couple of isolated outages, but so far, not enough to cause a major disruption in the supply chain semi,” Tilton said.
It remains something that needs to be closely watched in the weeks and months to come, he added.