Germany’s biggest chipmaker Infineon expects the current global supply shortage to last well into 2023, its chief executive said on Friday.

In an interview with the Frankfurter Allgemeine Zeitung, Reinhard Ploss said when the shortfall in chips would end would be dependent on not just demand, but also on how quickly manufacturing capacity can be expanded.

Construction of new plants and sites where silicon wafers can be processed into chips can take up to two and a half years, he said. Even upgrading existing plants would require up to a year.

“In areas where we have to wait for new semiconductor manufacturing, the chip shortage may stretch into 2023,” he said.

He estimated that capacity was about 20% short of demand currently in the mobile telephony chip sector, while in other areas the shortfall is at about 10%.

“But we also need a certain amount of idle capacity, or even better — flexible capacity. Without flexibility, the system would be under constant stress,” said Ploss.

A surge in demand for home electronics during coronavirus lockdowns combined with temporary factory closures has put pressure on supplies.

The automotive industry’s pivot to electric mobility has also triggered a strong demand for chips.

Almost two-thirds of German industrial companies have reported shortages in supply of semiconductors, according to recent research by the Munich-based IFO institute.

The chip shortage will also force automotive giant Daimler to cut workers’ hours in some plants next week, according to reports in the Stuttgarter Nachrichten and Stuttgarter Zeitung.

Published in The Express Tribune, August 14th, 2021.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.