When Will The Chipocalypse End? | Nominations For The 2022 Forbes CIO Next List | McDonald’s CIO On The Power Of Curiosity | And More

Plus: Amazon’s Devoted Cloud Customers Face A Decision After Outages: Leave, Stay Or Diversify?

Hi there, and welcome to the latest edition of the Forbes CIO newsletter. 

The chip shortage that has hit all kinds of manufacturers likely cost U.S. businesses a whopping $240 billion last year according to some estimates, with sectors such as automotive and household goods bearing the brunt of the impact. 

In response, semiconductor manufacturers have turned on the spending tap, pledging to pump billions into new chip-making factories, or fabs in industry-speak. Intel recently announced a $20 billion investment in a new fab in Ohio. Taiwan Semiconductor Manufacturing Co. (TSMC) plans to spend up to $44 billion in 2022 on new capacity and Samsung, the world’s leading maker of memory chips, aims to invest $35 billion or so this year. Such sums are a quantum increase over prior years’ investment plans.

But this tsunami of dollars won’t wash away the chipocalypse fast. As Forbes CIO Network Contributor Linley Gwennap notes in this post, the problem is that it can take two years to get a new fab up-and-running and producing chips in high volumes. Some plants begun in 2020 will come on line this year, which could start to ease bottlenecks, but Gwennap reckons the supply crunch will continue until 2023.

That analysis dovetails with the view of Simon Segars, the CEO of chip design company Arm, who I interviewed last year. Segars told me he thought it would take “a few years” for the crisis to work itself through and said that all of the players in the chip supply chain need to get better at sharing information about things such as inventory levels, demand forecasts and lead time changes to avoid future crunches.

Of course, there’s still a wild card that could throw even the 2023 timeframe into doubt. TSMC, which provides chips to many different customers, has plenty of manufacturing capacity in Taiwan, including fabs located along the coast facing China. If geopolitical tensions over Taiwan boil over in the next 12 months or so and China launches an invasion, then the disruption to the global silicon supply chain could be even worse than today’s crisis.

Thanks for reading, and do let me know if you have any suggestions for themes to cover in future issues. You can contact me on Twitter here and LinkedIn here. 

An important P.S.: We have opened nominations for the 2022 Forbes CIO Next List, which will be published this spring and will highlight game-changing CIOs reshaping the role in new and exciting ways. If you’re interested in nominating yourself, another CIO or a top tech executive with an equivalent title, you can do so here. And here’s a link to last year’s inaugural list.

Technology & Innovation

The lowdown on non-fungible tokens (NFTs): Want to know what all the fuss is about around NFTs and their implications for the business world? Then take a look at this helpful backgrounder, which highlights some areas where they may be particularly useful, including cybersecurity and the internet of things.

Low code/no code platforms reveal what users really want: The spread of easy-to-use code building blocks has empowered “citizen developers” to build their own applications. In doing so, they’re demonstrating what they really need rather than product managers or other staff having to guess their requirements. This should trigger a fundamental change in how all software is created and delivered.

Leadership & Strategy

Why the pandemic wrong-footed data models—and what to do about it: The supply chain chaos that has reigned almost since the pandemic began is a sign that forecasting models for supply and demand were quickly wrong-footed by the crisis. But it’s not just the models themselves that are to blame. Forbes CIO Network Contributor Tom Davenport argues many companies still lack timely access to data that could have helped them adjust faster.

Leadership lessons from the NFL quarterback G.O.A.T.: So after a lot of speculation, Tom Brady has finally decided to throw in the towel on his stellar sporting career. In this post, some leadership commentators share their thoughts on what top executives can learn from his longevity in such a high-pressure role.

Talent & Careers

American Express names a new CIO as its digital efforts accelerate: The financial-services giant has poached a banking executive to lead its tech function. Ravi Radhakrishnan has joined it from Wells Fargo, where he was CIO and head of technology for its commercial, corporate and investment banking businesses.

A radical move to streamline recruitment—pay candidates for interviewing: OK, this is a provocative one. A big beef of many candidates for jobs is that they get dragged through an interminable number of poorly coordinated interviews. But what if they got paid for each one? The thinking goes that this would make companies more likely to question whether many meetings are really necessary.

"Productive collaboration happens when conversations focus on value, not cost. It’s really important to me that technology has a seat at the table and that we are part of strategic conversations, as opposed to simply being asked for solutions."

Daniel Henry

Global CIO, McDonald's

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