'A big problem': Cisco CEO predicts another six months of chip shortages

Chuck Robbins says scarcity in semiconductors will continue this year

Cisco CEO Chuck Robbins believes it will be another six months before the shortage in semiconductor chips starts to ease.

Orders for the vital computer components originally fell at the start of the pandemic which led to reduced production. But the subsequent rise in demand for electronics caused global shortages.

Other issues including a fire at a semiconductor factory in Japan and extreme weather conditions have added to the problem and Robbins believes there is still some way to go before things improve.

"Right now, it's a big problem," he told the BBC.

"Now we think it may be exacerbated because customers were afraid or placing multiple orders. There's so much demand in the system because they're trying to get ahead of it.

"We think we've got another six months to get through the short term. The providers are building out more capacity and that'll get better and better over the next 12 to 18 months, we think."

The shortage of chips has caused delays in the production of various electronic devices including computers, laptops and gaming consoles.

Robbins is one of many industry leaders to weigh in on the issue, with Intel CEO Pat Gelsinger recently predicting that shortages will last beyond 2022 in an interview with The Washington Post.

He said Intel will invest $20bn into two new plants in Arizona while expanding an existing factory in County Kildare, Ireland.

"Semiconductors go in virtually everything and what happened is when COVID hit I think everyone thought the demand side was going to decline significantly and in fact we saw the opposite," Robbins went on to add.

"All of the manufacturers like us and car manufacturers and everyone sent lower demand signals to the providers of semiconductors. They then reduced their capacity and at the same time demand went up instead.

"It was a complete shock to many of us."