Overview of chip industry bottlenecks causing huge increases in lead times, which at Broadcom grew to 22.2 weeks, up from 12.2 weeks in February 2020
Bloomberg : Tweets: @thestalwart , @liamspradlin , @business , and @bradstone Tweets: Joe Weisenthal / @thestalwart : This is a really phenomenal presentation from @ianmking @pogkas and @debbywuintaipei on the chip shortage https://www.bloomberg.com/... Liam / @liamspradlin : I am only retweeting this because the picture - for a story about the chip shortage - depicts gloved hands holding hundreds? of chips and I enjoy the contrast of it all. https://twitter.com/... @business : A global shortage of chips has snarled everything from phones and gaming consoles to cars. @pelstrom explains https://www.bloomberg.com/... (Video via @Quicktake) https://twitter.com/... Brad Stone / @bradstone : Here's what's causing the chip shortage that's snarling global business. Illuminating data viz from @ianmking and friends: https://www.bloomberg.com/... via @bbgvisualdata
Context & Ripple Effects
Bloomberg's presentation puts hard numbers on the shortage arc that began with the surge in laptop, 5G and car demand in late 2020: Broadcom's lead time nearly doubled from 12.2 weeks in February 2020 to 22.2 weeks. The squeeze came from both sides — buyers stockpiling amid US-China trade tensions while fabs chased higher-margin, cutting-edge nodes, leaving older chips starved.
The supply side was already locked in: vital production equipment was itself backlogged, so new capacity couldn't respond quickly. The coverage that follows traces the whole swing — from the structural causes of the shortage through the peak, when sourcing turned into a lottery at 22-week waits.
First-order effects
- Buyers of Broadcom components — networking, phone and consumer-electronics makers — face near-doubled wait times, forcing allocation decisions and shifting pricing power toward chipmakers with stock on hand.
- Older-node chips, already identified as the hardest-hit segment in early 2021, get squeezed further as capacity concentrates where margins are highest.
Second-order effects
- Capacity expansion is throttled by its own supply chain: wire bonding machines and other key tools carry 10–12 month lead times, so fabs that order equipment today still can't add output until well after the shortage peaks.
- Extended waits incentivize double-ordering across the buyer base, inflating apparent demand beyond real end consumption — the classic setup for an overcorrection.
Third-order effects
- If the pattern holds, the shortage resolves into a glut rather than balance: by August 2022 analysts were already flagging an "inventory correction" that could be the worst downturn in a decade.
- Structurally, the long capacity lag converts every demand shock into a multi-year boom-bust cycle, making lead-time data a leading indicator worth tracking ahead of headline supply numbers.
The trend: Semiconductor lead times are the tell of a capacity-lag-driven cycle that swings from shortage to inventory glut as tooling constraints delay every response.