(Bloomberg) -- Chips are set to remain in short supply for at least a year as demand from carmakers and other manufacturers remains robust, and ramping up production capacity takes time, said the head of Southeast Asia’s Integrated Micro-Electronics Inc.

The maker of electronic components, a unit of Philippine conglomerate Ayala Corp., has already topped 2020 in order bookings this year as economies reopen, said Arthur Tan, IMI’s chief executive officer. With more than 20 facilities in 10 countries, the company is the sixth-largest provider of electronics manufacturing services to carmakers, he said. The vehicle products it assembles include power modules, cameras and inverters.

Automakers from Toyota Motor Corp. to General Motors Co. have been ensnared by the chip shortage, forcing many to cut vehicle output, while manufacturers of consumer electronics have also been hit. Tan discussed the situation in an interview Thursday, and his comments have been lightly edited for brevity and clarity:

What is the chip shortage’s impact on IMI’s business?

Everyone was hit by the chip shortage and it’s now affecting the entire supply chain, including non-automotive. Demand went down significantly because of the lockdowns globally, which happened in different cycles. Suppliers didn’t turn on all the capacity because there was no demand.

During the lockdown, demand through e-commerce came in. We lost the services industry, nobody was flying nor going to hotels. But people have money, so where do you spend it? It’s either food or goods. As people work from home, you need a new computer, a new PC display, cameras, routers, etc.

What did that shift in consumer spending do to chip demand?

The capacity of chip suppliers was channeled to that new demand because no one was buying cars nor riding planes. Then it started to normalize, the demand cycle came back as some economies reopen. You can now go out, but no one wants to ride the train nor the bus because of fear of getting the virus. Now, you want to buy a car.

Suppliers are now saying, “what I ordered before, I want to order again.” But chip manufacturers are saying, “wait, I’ve transferred the capacity to computers, routers, goods and sanitation like UV light.”

When do you see the shortage easing?

When the load returned for auto and industrials, the other side didn’t diminish and therefore we now have what we call the perfect storm -- that in spite of demand coming from auto, they can’t switch the capacity back until you add more capacity.

But adding capacity on the chip side is not instantaneous. The equipment manufacturer setting it up -- the technology and everything -- it takes about a year. Or probably more, depending on the type of chip you’re looking for. 

And that will also depend on lockdowns? 

Exactly. For example, Malaysia was hit. It has several fabs running, once they stop, that’s capacity taken out on a global basis. In countries where we’re at, lockdown is not an issue. We have factories in Germany and in the U.K., even through the lockdown, their focus was making sure manufacturing continues. The only ones that shut were in the Philippines and Mexico.

What is your outlook for the industry?

The bright light at the end of the tunnel here is that none of these projects are being canceled. So even if I tell my customers, I can’t deliver or I can deliver next year, no one cancels. They say, “go through with it, look for parts.” And they keep coming.

This year, in terms of new program wins, it’s not yet the end of the year but we already surpassed last year’s total. In spite of these logistics and supply chain issues, the programs continue.

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