Toshiba Warns Power-Chip Supply to Stay Tight for Another Year

(Bloomberg) — Toshiba Corp. said it won’t be able to meet demand for power-regulating chips for another year and, in certain cases, through the end of 2022, offering a fresh warning for makers of cars, consumer electronics and industrial machines struggling with component shortages.

“The supply of chips will remain very tight until at least September next year,” said Takeshi Kamebuchi, a director in charge of semiconductors at one of the company’s units. “In some cases, we may find some customers not being fully served until 2023.”

Material shortages and demand outpacing output capacity are to blame for Toshiba’s inability to fulfill orders for a component that doesn’t require advanced production technology and has typically been deemed a commodity, according to Kamebuchi. Mature tech such as Toshiba’s power chips is cheaper than cutting-edge memory and sensors, but no less important for any electronic device. If the processor is the device’s brain, power-regulating silicon and circuitry serve as the heart and vascular system, helping to smoothly transmit electricity.

Toshiba plans to invest 60 billion yen ($545 million) in the three years to March 2024 to boost output of power semiconductors, Kamebuchi said. Options beyond that period include additional investment that may include building another factory. Despite some investor concern that demand will evaporate after the pandemic-fueled frenzy for electronics, Kamebuchi said the company is confident that orders will keep growing rapidly enough to sell out all its production lines for years to come.

Automakers including Toyota Motor Corp. and Volkswagen AG have had to halt or reduce production due to widespread chip shortages. Kamebuchi said some chipmakers are prioritizing auto companies in their production and Toshiba is similarly making every effort to minimize the impact on car assembly lines.

Read More: Top India Carmaker Says Output to Drop 40% on Chip Crisis

“We usually receive orders weeks and months in advance, but we currently face increasing inquiries for half a year into the future and beyond,” he said. “Long-term contracts piling up like this is new to us.”

Video-game consoles are another prominent victim of the power chip shortage. Sony Group Corp. said it was still confident it can sell more than 14.8 million units of the PlayStation 5 this fiscal year to match the pace of its predecessor, but the new console’s production in the April-June quarter lagged behind the PlayStation 4’s for the same period. Nintendo Co.’s Switch production hasn’t been sufficient to serve customer demand, according to President Shuntaro Furukawa. His company intends to sell 25.5 million Switch units in the current fiscal year.

Read More: Nintendo Drops 9% After Weak Earnings and Buyback Announcement

Game console production is vulnerable to a lack of components. Manufacturers are making daily calls to suppliers to ensure parts will reach assembly lines as promised, according to a top executive at an assembly contractor. Some console customers have told the assembler that they may alter their circuit board design to reduce the required components, the person said.

Toshiba is holding daily discussions on how best to allocate its limited output, Kamebuchi said. The company’s having to apologize to some customers for being unable to deliver in a timely fashion.

“We consider which customer faces the most severe situation, such as the risk of the whole production line halting or the business getting obliterated without the supply of chips,” he said. “Game console makers are among the customers making the strongest demands and I’m sincerely sorry for their frustration as none of them have a 100% satisfaction.”

Consumer electronics makers usually start with a conservative production plan and dynamically adjust it in accordance with in-store sales. That just-in-time strategy has been tough to execute this year because additional requests for parts like Toshiba’s are hard to fulfill. Switching to alternative providers isn’t an easy solution because of safety certifications that power-regulating chips play a role in — console makers can’t just go to the next semiconductor maker and ask for the same part.

More stories like this are available on

©2021 Bloomberg L.P.

Close Bitnami banner