Make no mistake, the investments into new chip manufacturing capacity are enormous. While it is true that a lot of chip manufacturing capacity is being planned as we speak, fueled by government initiatives such as the US Chip and Science Act (2022) and the EU Chips Act (2022), it may take many years until supply matches or surpasses demand for the majority of different types of chipsets. We believe that once the economy recovers and a new demand wave kicks in, chipset supply will become much more constraint again. Despite the demand slump, current chip lead times remain elevated compared to pre-COVID-19 levels. Chipset supply to remain constraint for years to come in the face of surging demandĬhipset supply chains have considerably improved in 2023 as demand has weakened in the face of a slowing economy. Compared to our last IoT device market update a year ago, we lowered our five-year IoT market outlook for two important reasons: 1. According to our analysis, by 2027, there will likely be more than 29 billion IoT connections.
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