The COVID chip shortage taught manufacturers lessons that most of them hoped they’d never need again. Four years later, many of those lessons apply once more, though not all of them, and not in the same way. At Thomas Instrumentation, we worked through the 2020 to 2022 shortage alongside our customers, and we’ve been comparing that period to this one since the first memory allocation notices arrived.
This post looks honestly at how the two shortages compare, including where this one is worse. It then lays out what we actually did last time, and what we’re doing differently now. If you want a broader view of the planning side, our earlier piece on navigating supply chain challenges in electronics manufacturing covers the fundamentals.
What Happened in 2020-2022
The last shortage was a chain of shocks. Demand for PCs and home electronics jumped during lockdowns while automakers canceled chip orders, then rushed to reinstate them when vehicle demand came back faster than expected. A series of supply disruptions landed on top of that, including the February 2021 winter storm that shut down semiconductor fabs in Austin and the March 2021 fire at Renesas’s Naka plant in Japan. Ports and freight added their own delays.
Lead times stretched to levels few buyers had seen. A Federal Reserve note published in September 2026, drawing on ECIA lead time data, shows average semiconductor lead times rising from roughly 10 to 13 weeks before the pandemic to a peak of around 40 26 weeks in early 2022. Microcontroller lead times roughly doubled to about 52 30 weeks, the highest of any category, and analog chips peaked near 40 29 weeks. After 2022, lead times eased across every category.
How This Shortage Compares to the Last One
Where This One Is Worse
- The demand isn’t temporary. The last shortage was driven by a demand spike and a string of disruptions that eventually resolved. This one is driven by sustained AI infrastructure spending, and suppliers are building their businesses around it.
- Some parts aren’t coming back. Last time, parts on allocation eventually returned. This time, manufacturers are exiting products on purpose. The largest memory makers have end-of-life plans for DDR4, Samsung’s MLC NAND is ending, and Murata is winding down certain general-purpose MLCCs.
- Prices have moved further. Conventional DRAM contract prices nearly doubled in a single quarter in early 2026, and major capacitor suppliers have raised prices by 30% or more.
- Capacity is committed years ahead. Long-term agreements between memory makers and the largest cloud and AI companies have locked in supply well into 2027, which leaves less room for mid-volume OEMs than there was last time.
Where This One Is Better
- The warnings are clearer. End-of-life dates, capacity plans and price forecasts are being published months in advance. In 2021, many disruptions arrived without notice.
- Logistics aren’t the main bottleneck. The port congestion that compounded the last shortage isn’t the core constraint this time, although freight costs remain volatile and suppliers have cited them in recent price increases.
- More buyers remember 2021. Many purchasing teams kept the habits they built then, which makes conversations about early planning easier.
What Hasn’t Changed
Allocation still favors committed demand over tentative demand, and forecasting still wins. Companies that give their suppliers and manufacturing partners real numbers early get served before companies that don’t.
What We Did During the Last Shortage
We’ve written on our site that during the COVID pandemic and parts shortage, our forward-thinking approach and strategic planning enabled both us and our clients to thrive. In practice, that came down to three habits.
Forecasting Early With Our Customers
We asked customers for longer and firmer forecasts than they’d typically shared, and we kept asking as conditions changed. A forecast that looked six months ahead gave us time to secure parts that a four-week order window never would have.
Buying Ahead Against Real Customer Schedules
Where we could see a customer’s build schedule clearly, we bought critical parts ahead of it rather than waiting for the order to drop. Buying against real schedules, instead of guesses, kept that inventory tied to builds that were going to happen.
Telling Customers What Was Coming
When we saw a lead time stretching or an allocation notice arrive, we told the affected customers directly, before it turned into a missed date. Bad news delivered early gives a customer options. Delivered late, it only gives them a problem.
What We’re Doing Differently This Time
The same three habits still apply, but this shortage calls for a few more:
- Watching memory and passives first. Last time, microcontrollers were the headline. This time, memory and capacitors are where risk concentrates, and we review those lines on every active BOM. The details are in our post on the DRAM and NAND shortage.
- Planning further out. With end-of-life dates published into 2028 and 2029, planning a quarter or two ahead isn’t enough. We’re looking at 2027 and beyond with customers now.
- Putting redesign on the table earlier. When a part isn’t coming back, buying more of it only delays the problem. Our PCB design engineers can redesign affected boards, and we’ve laid out when that makes sense in our guide to last-time buys versus redesigns.
- Helping kitting customers see risk sooner. Customers who supply their own parts carry more of the exposure, so we’ve written a guide specifically for consigned kits.
For the market-wide view of prices and supply, see our overview of chipflation.
How to Forecast With Your Contract Manufacturer
If there’s one lesson from 2020 to 2022 worth acting on this quarter, it’s this one. Useful forecasting with your contract manufacturer looks like:
- A rolling 12-month view, updated at least monthly, so your manufacturer can see changes as they happen.
- A clear line between firm and projected quantities, because suppliers treat them very differently during allocation.
- Early notice of changes, both increases and decreases, so parts can be reallocated before they’re stranded.
- A named contact on each side, so allocation notices and schedule changes reach someone who can act on them.
None of this is complicated. It just has to happen before it’s needed.
Fifty-Five Years of Shortages
Thomas Instrumentation was founded in 1971, and our legacy of innovation includes more than one supply crisis. The last shortage reinforced something we already believed: the parts matter, but so does the relationship. Customers who hear about a problem early, from someone who’s actually watching their BOM, have time to do something about it.
Frequently Asked Questions About Lessons From the COVID Chip Shortage
What caused the 2020-2022 chip shortage?
The shortage was caused by pandemic-driven demand swings, automakers canceling and then reinstating chip orders, and supply disruptions such as the 2021 Texas winter storm and the fire at Renesas’s Naka plant. Port and freight congestion made delays worse.
Is the 2026 component shortage worse than the COVID chip shortage?
In some ways, yes. The demand behind it is more sustained, some parts are being discontinued rather than delayed, and memory prices have risen further. Warnings are clearer this time, though, and logistics are less of a bottleneck.
How can manufacturers avoid missed deliveries during a component shortage?
Share firm, rolling forecasts with your contract manufacturer, buy critical parts ahead of real build schedules, approve alternates early, and make sure allocation notices reach someone who can act on them right away.
How far ahead should I forecast with my contract manufacturer?
A rolling 12-month forecast is a good baseline, with firm quantities clearly separated from projections. For parts with long lead times or end-of-life dates, look further out.
Plan the Next 12 Months Together
If you’re building with us, or thinking about it, the best time to share your 2027 forecast is now. We’ll review your BOM, flag what’s at risk and help you plan around it. Get in touch with our team to start the conversation.
