Disruption in global chip supply is threatening the issuance of up to 1bn payment cards over the next 18 months, with 347m cards at risk of not being issued in the second half of 2021 and up to 740m in 2022 because of “significant chip shortages”, according to an ABI Research forecast.

“It has been well documented that the entire semiconductor industry is currently going through a high level of uncertainty as demand for chips continues to far exceed all expectations across all industry segments,” the analysts say.

“Supply cannot currently keep up with increasing demand and the payment cards industry is by no means immune from this situation

“Although the chip shortage impact has remained largely invisible through the first half of 2021, with the impact counterbalanced somewhat by existing stock levels, it is beginning to become very visible in the second half of 2021.

“As the lead times from chip order to delivery continue to lengthen, 2022 should be considered the critical chip shortage impact year.”

“Issuers may need to look at prioritisation strategies, focusing on the replacement of expired cards first, or adopting a strategy whereby they prioritise one payment card form factor over another, such as credit over debit,” ABI Research adds. 

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