Kearney: Chip Supply Glut Arrived in Early 2024 - Three Areas Need Re-ExaminationA · FULL TRANSLATION
- Kearney paper says chip supply-demand reversed between 2021 and early 2024
- Supply chain resilience requires re-examination across three areas
- Shortage-era inventory habits now create cost and writedown risk
Kearney's new paper on semiconductor supply chain resilience delivers a needed memory reset: the historic shortage of 2021 fully inverted by early 2024, and the task now is managing oversupply risk, not hoarding capacity. The pandemic taught companies — automakers especially — that stockpiling equals safety; post-inversion, excess inventory means capital cost and writedowns. Crucially, 'semiconductors' is no longer one market: AI-driven leading-edge stays tight while mature nodes swim in surplus, demanding strategies differentiated by node and application. For Taiwan, the world's foundry hub, the paper reads as a forecast of customer behavior: more long-term contract renegotiation, regionalization demands, and compressed inventory commitments. Investors should treat customer inventory months as a more leading indicator than revenue. Watch mature-node utilization rates and automotive contract renegotiations.
(Compiled from A.T. Kearney Japan press release) A.T. Kearney released a paper titled 'Shoring up the semiconductor supply chain,' outlining how semiconductor companies should re-examine their supply chains and the areas fabs must address. The paper finds that the global chip shortage beginning in 2021 had fully reversed into a supply-demand inversion by early 2024. Amid geopolitical risk, national industrial policies and surging AI demand, semiconductor supply chains face structural redesign. The paper organizes the re-examination into three areas, spanning geographic configuration of supply networks, capacity strategy by process generation, and inventory and long-term contract design with customers. Kearney emphasizes that semiconductors are no longer a single market: leading-edge capacity remains tight on AI demand while mature nodes face oversupply, requiring differentiated capacity and inventory strategies by node and application, with geopolitical scenarios treated as a standing variable in supply chain design.