The computer chips shortage that is one of the main drivers of inflation could last another two years, according to the boss of IBM.

Jim Whitehurst, the firm’s president, told the BBC on Friday that the tech industry was battling to meet demand since the reopening of the world economy, with the car industry particularly impacted.

“Some factories were forced to close when the pandemic first struck in 2020. The backlog in production was compounded by soaring demand for chips from a boom in sales of laptops, game consoles and mobile phones as people were forced into lockdown,” reported The Guardian.

In the interview, Mr Whitehurst said: “There’s just a big lag between from when a technology is developed and when [a plant] goes into construction and when chips come out.

“So frankly, we are looking at couple of years … before we get enough incremental capacity online to alleviate all aspects of the chip shortage.”

He added: “We’re going to have to look at reusing, extending the life of certain types of computing technologies, as well as accelerating investment in these [fabricating plants], to be able to as quickly as possible get more capacity online.”

The continuing shortage is now likely to cost the global automotive industry $110 billion in revenue in 2021, according to consulting firm AlixPartners.

The forecast is up by 81.5% from an initial forecast of $60.6 billion.

Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners, said: “The pandemic-induced chip crisis has been exacerbated by events that are normally just bumps in the road for the auto industry, such as a fire in a key chip-making fabrication plant, severe weather in Texas and a drought in Taiwan,” he said in a press release. 

“But all these things are now major issues for the industry — which, in turn, has driven home the need to build supply-chain resiliency for the long term.”