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No end to global chip shortage before H1 2023, STMicro CEO says

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A woman visits a semiconductor device display at the Appliance and Electronics World Expo (AWE) in Shanghai, China March 23, 2021. REUTERS/Aly Song

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PARIS, July 29 (Reuters) - The global chip shortage that is hindering production forecasts of giant companies like Apple Inc (AAPL.O) and Volkswagen AG (VOWG_p.DE) is here to stay until the first half of 2023, the chief executive of STMicroelectronics (STM.BN) said on Thursday.

"Things will improve in 2022 gradually, but we will return to a normal situation ... not before the first half of 2023," said Jean-Marc Chery in an interview.

By "normal situation," Chery said he meant regular chip inventory levels and average delays of about three months to replenish components.

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The chip shortage, which stems from a boom in demand from a wide range of industries, is stimulating prices, said Chery, who has led the Franco-Italian chipmaker since 2018.

The average price of STMicro's chips has increased by 5% in 2021 from a year ago, he said, adding that the group expects further price increases in the second-half of 2021 as well as in 2022.

"It's not like in the past, when everyone was waiting for Microsoft (MSFT.O) to release a new operating system that would drive demand for many more computers," Chery said.

"What we have is global shift ... with massive orders for components."

The Geneva-based group will be able to meet only 70% of total customer demand this year, Chery said. That proportion will rise to 85-90% next year as the company invests in production capacity, he added.

Earlier on Thursday, STMicro raised its full-year sales and investment outlook as surging demand from car and phone makers boosted second-quarter profit. read more

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Reporting by Mathieu Rosemain in Paris Editing by Peter Graff and Matthew Lewis

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