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<\/p>\nJUL 20 2022<\/p>\n
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The\u00a0global chip shortage<\/a>\u00a0is not over yet, and the war in Ukraine continues to put a strain on supplies of important parts needed, one analyst told CNBC Tuesday.<\/p>\n \u201cThe semiconductor supply is not going to increase immediately. There are a lot of\u00a0raw materials<\/a>,\u00a0gases<\/a>, which were required for production of those semiconductors,\u201d Vinay Gupta, the International Data Corporation\u2019s Asia-Pacific research director told CNBC\u2019s \u201cSquawk Box Asia<\/a>.\u201d<\/p>\n Citing supply chain challenges due to\u00a0Russia\u2019s war in Ukraine<\/a>, Gupta said the two countries capture a large part of the market share, with Russia and Ukraine being the largest exporters of krypton \u2014 a gas used in the chip production.<\/p>\n Neon is also critical for the chipmaking process and is used for lasers, known as lithography, where machines carve patterns onto tiny pieces of silicon made by the likes of\u00a0Samsung<\/a>,\u00a0Intel<\/a>\u00a0and\u00a0TSMC<\/a>.<\/p>\n More than half of the world\u2019s neon<\/a>\u00a0is produced by a handful of companies in Ukraine, according to Peter Hanbury, a semiconductor analyst at research firm Bain & Co.<\/p>\n Semiconductors are used in everything, from mobile phones and computers to cars as well as home appliances.<\/p>\n Supply chain disruptions and rising costs will also mean \u201cthe average selling price of the devices is going to rise and the infrastructure vendors would be then passing it down to the customers,\u201d Gupta added.<\/p>\n<\/div>\n Rising inflation<\/a>\u00a0and expectations of more\u00a0monetary tightening<\/a>\u00a0are already causing a \u201cconsumer-led slowdown,\u201d said Gupta.<\/p>\n \u201cIT spending, especially consumer IT spending, is showing signs of recession.\u201d<\/p>\n While spending on enterprise IT \u2014 which includes software services, cloud and IT services \u2014 are still holding out, inflation has driven businesses\u00a0<\/strong>to \u201cprotect their IT budgets right now.\u201d<\/p>\n Coupled with rising interest rates all around the world, this slowdown is \u201cgoing to bite,\u201d he added.<\/p>\n \u201cBut the hopes are that this will be a shallow slowdown, because the government and central banks are trying to balance the rising inflation and \u2026 interest rates,\u201d Gupta added.<\/p>\n Last week, statements from two officials indicated the Federal Reserve is on its way to\u00a0another sharp interest rate hike<\/a>\u00a0in July and perhaps in September as well, even if it slows the economy.<\/p>\n In June, the Fed\u00a0approved a 75 basis point<\/a>, or 0.75 percentage point, increase to its benchmark borrowing rate, the biggest such move since 1994.<\/p>\n<\/div>\n On Tuesday,\u00a0Bloomberg<\/a>\u00a0reported Apple\u2019s plans to slow hiring and spending on growth next year to deal with a possible downturn. A \u201csimilar trend\u201d will be observed across Asia\u2019s tech sector, said Gupta.<\/p>\n \u201cI believe that would be a trend which we will start seeing [in] late 2022 or early 2023 if the situation does not improve.\u201d<\/p>\n Coupled with rising interest rates all around the world, this slowdown is \u201cgoing to bite,\u201d he added.<\/p>\n \u201cBut the hopes are that this will be a shallow slowdown, because the government and central banks are trying to balance the rising inflation and \u2026 interest rates,\u201d Gupta added.<\/p>\n Last week, statements from two officials indicated the Federal Reserve is on its way to\u00a0another sharp interest rate hike<\/a>\u00a0in July and perhaps in September as well, even if it slows the economy.<\/p>\n In June, the Fed\u00a0approved a 75 basis point<\/a>, or 0.75 percentage point, increase to its benchmark borrowing rate, the biggest such move since 1994.<\/p>\n<\/div>\n\n<\/a>\u2018Signs of recession\u2019 for consumer spending<\/h2>\n
\n\n<\/a>Slow hiring, less spending in Asia<\/h2>\n
\n\n<\/a>Slow hiring, less spending in Asia<\/h2>\n