Supply chain issues likely to persist well into 2022: Celestica CEO
There are two sides to the chip shortage dilemma that’s causing havoc in sectors across the world, according to the top executive of a multinational electronics manufacturer based in Canada.
Rob Mionis, president and chief executive officer for Celestica Inc., said ongoing supply shocks related to chips of all sizes have led to a lucrative bonanza for some industries and punishing futility for others.
At Celestica, it’s been a unique mix of both, said Mionis, given that the company has firsthand experience of these differentiating circumstances.
“The global chip shortage has been affecting everyone — from the consumer of either a PC or a car, all the way through the foundries that actually make the chips,” Mionis said in an interview Wednesday.
“For us, it’s actually a dual-edged sword. On one portion of our business, we actually make the capital equipment that helps support the manufacturing of chips, and that business has been booming. On other parts of our business, we’re actually consuming those chips and it’s been a challenging environment.”
Alarm bells for semiconductors began just as COVID-19 arrived. Globally, there was already a steep, upward trajectory of a demand for chips and microchips that can be seen over the last decade. And amidst the pandemic, it has completely exploded.
On top of that, Mionis believes businesses aren’t through the thick of it yet.
“I think it’ll last most of 2022, some are even saying the first half of 2023,” he said about the chip shortage.
Still, his own company hasn’t been standing still.
On Wednesday, Celestica announced a US$306-million acquisition of Singapore-based PCI Ltd., which has five large-scale manufacturing and design facilities in Asia.
The transaction, intended to strengthen Celestica’s overall portfolio, will also bring over 20 complementary blue-chip customers to the Canadian company’s international customer base for cross-selling opportunities, said Mionis.
“Over the last year, it’s been a winding road with respect to navigating through the pandemic,” Mionis said. “But we’ve always had our focus on keeping our employees safe and, as such, we’ve been able to serve our customers and support our shareholders... Now, we can start focusing on growth again."