Do you have any estimates on when the PC supply constraints could see significant improvement?
The first thing is, this is not a linear thing—it’s not going to linearly get worse or linearly get better. This is a very volatile situation.
Our industry went into COVID with already a bit of a shortage on CPUs. That actually got better during COVID. The next gating item were panels, and it wasn’t so much the glass—it was more the ICs that sit on that panel. That is still a bit of a challenge but it has actually improved significantly. What is now the challenge is very much the ICs themselves. We have ICs obviously across all of our portfolio. We’ve never had to analyze it in as much detail as we did over the last couple of months and quarters. It has required us to speak directly to suppliers that are in that IC supply business—that’s not necessarily something that the industry has been doing before. Now we have to. When we talk about CPUs and panels, the amount of industries that are impacted by that are significantly less than when we talk about an IC shortage. ICs go into pretty much everything.
When you look into integrated circuits, it’s a bit like oxygen—everybody has them. The mobile phone industry, the IT industry across pretty much all the categories there, the server business and storage business. Automotive is a huge, huge customer for ICs—in particular as they are migrating from combustion engines to electric vehicles. An electric vehicle uses a lot more ICs. And so there is this challenge of, demand is up across all of these categories. And so there’s a capacity challenge. And at the same time, while everybody’s trying to bring capacity up, you have certain countries being impacted again, on and off, by COVID. And so it is a very volatile situation. So this is what we’ve been managing for the past 18 months. And we will continue to manage this. I’m not going to give you a timeline about when this will come to an end—because I don’t know.