Moody's Analytics has warned that the supply of semiconductor chips will remain tight, despite companies learning to live with COVID-19.
The chips are used in thousands of devices and shortages will continue into 2022, senior economist Tim Uye said in a new report released Monday.
But it is not expected to get worse, as more economies achieve widespread vaccination coverage.
The Delta surge in mid-2021 affected major countries in the semiconductor supply chain – Malaysia, Vietnam, Taiwan, Korea and Japan.
At the time, less than half of the population in those countries had received a single dose of a COVID-19 vaccine, and only one-quarter had been fully vaccinated.
This meant that a surge in cases led to a significant halt in production, causing a ripple through the rest of the chain as factory closures in one country could disrupt production in Japan.
“The vast majority of populations in major chip-producing countries around the world are now vaccinated, compared to much smaller numbers during the mid-2021 delta spike,” Mr. Ui said.
But with the Omicron version growing in many countries, particularly in Europe and North America, he said a return to border restrictions and production dislocations was on the horizon.
While there were signs of easing chip shortages, the average lead time in December stood at a record 25.8 weeks, six days longer than in November, according to the latest report by Susquehanna Financial Group.
"Due to China's zero-COVID policy, we are most likely to see an impact in production from Chinese plants," Mr. Ui said.
The major Chinese manufacturing city of Xian has been closed for two weeks and it is not known when it will end.
South Korea's Samsung Electronics has been affected and PowerTech Technology's Xian plant is operating at less than half of its capacity.
Micron Technology, one of the world's largest chip suppliers, has warned that the lockdown will delay the supply of its memory chips, which are widely used in data centers.
Earlier in the pandemic, many companies that used to manufacture prematurely when main supplies ran out were affected.
Since then, Sony has doubled orders for chips used in its gaming consoles and Tesla has reduced its reliance on some major suppliers.
But long-term barriers to increasing supply for the chip industry still apply, Mr. Yu said.
Major chip makers in Taiwan, Korea and China have announced plans to expand operations, with government support.
The chip types most likely to grow in the near future are those used in logic and sensor applications, with demand for 5G technology and electric vehicles further increasing.