Global supply chain encounters ‘headwind’

Shortages of semiconductors, auto parts and other key commodities are likely to continue for the foreseeable future, Citi warned.

“Overall, we see pressures weighing on global supply chains tend to last longer than forecast a few months ago and are not easily resolved any time soon,” said Nathan Sheets, chief economist. globally at Citi Research – the same research team wrote in the just-released report.

“And the Russia-Ukraine conflict seems to exacerbate those pressures. Based on what is happening now, any hope of a supply chain recovery in the near future seems far-fetched. The challenge in the coming months will be no less severe than during the past two years.”

The world is facing a serious shortage of semiconductor chips. Photo: Reuters.

Inflation, labor shortages, and rising household savings are all headwinds facing supply chains, according to Citi.

“In order for the pressures that are weighing on supply chains to ease, we need to see real positive developments of the epidemic,” Citi said. “Some supply chain issues are showing signs of improvement, but there are also many difficulties that we don’t know when they will end.”

The evolution of the pandemic is an important factor because the pandemic itself has completely destroyed the idea that global supply chains are being optimized.

“Until the pandemic happened, many people thought that supply chains were being ‘optimized’ and operating smoothly,” experts said.

Previously, enterprises were said to have successfully solved the problem of streamlining inventory and ensuring a stable flow of input materials for production. But over the past two years, we’ve seen a spike in demand for goods, along with breaks in the supply chain of the inputs used to make those goods.”

The supply chain crisis has had the biggest impact on the tech sector.

Apple announced the new Macbook Air product during its Worldwide Developer Conference on June 6. But this new Apple product may fall into a shortage of supply in the near future related to the blockade orders to prevent the Covid-19 epidemic in China.

Meanwhile, semiconductor chips continue to fall into serious shortages, partly because of China’s Covid zero strategy, and partly due to the high global demand for computers and cars during and after the pandemic. .

“We are only halfway through the chip crisis,” Intel CEO Pat Gelsinger told Yahoo Finance Live on the sidelines of the World Economic Forum in Davos, Switzerland. “I predict this situation will continue until 2024,” he said.

According to Trong Dai