Chipmaker says shortages will lead to supply chain power struggle



David Keohane, Claire Bushey, and Joe Miller | Financial Times

The global chip shortage is set to ignite a power struggle between chip manufacturers and their customers about how the industry’s supply chain works and who pays the costs of carrying inventory.

In an interview with the Financial Times, the chief executive of one of Europe’s biggest chipmakers said that customers would have to accept that their “dream is over”.

Jean-Marc Chéry, chief executive of STMicroelectronics, said that his customers, whether carmakers or car part suppliers, will need to hold more inventory or agree to more non-cancellable contracts to make supply more predictable and reduce the risk of shortages.

That would mark a shift from the current system where chipmakers hold excess inventory to accommodate the sector’s just-in-time supply chain.

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