Charles Robbins, the chairman and CEO of Cisco Systems (NASDAQ:CSCO), said Tuesday that the computer chip shortage will "start to see improvement" in the second half of 2022, when supply will finally come up to meet demand.
Speaking to CNBC, Robbins advocated the expansion of semiconductor manufacturing capacity in the U.S. and Europe.
"We need geographic diversity for issues of climate and emergency situations so that we can manage our way through those," he said.
Robbins said that the industry should move faster to build out chip manufacturing capacity. He pointed to the public-private partnerships that brought COVID vaccines to market as examples of how new facilities could be built quickly in the U.S.
Explaining the roots of the chip shortage, the Cisco CEO reported that the post-pandemic surge in demand took most business leaders by surprise, as the economy recovered much faster than people expected.
"Every industry signaled a perceived decline in demand and almost every industry saw an increase in demand," he explained.
Beyond the pandemic surge, the Cisco CEO also noted a longer-term increase in the desire for semiconductors, as more products have become dependent on computers. He pointed to the auto industry as an example of this phenomenon.
Turning to the company's products, Robbins highlighted new additions to the firm's WebEx platform, as CSCO looks to take advantage of the new hybrid work environment.
"[The hybrid work future] is about more than just video meetings. It is about understanding return to office safety, understanding where your employees are, giving them the flexibility, ... being able to troubleshoot and have the same capabilities into that home office as you have for a small branch," he said.
As to the company's own hybrid plans, Robbins reported that CSCO was letting front-line managers determine schedules for their team members.
CSCO rose steadily in late 2020 and through much of 2021, reaching a 52-week high of $60.27 in early September.
Shares have been trading in a range off that level over the past few weeks. On Tuesday, the stock edged up in early trading, rising about 1% to $55.76 at around 9:45 AM ET.
Even with the recent consolidation, CSCO has been able to outperform the S&P 500 for most of the past year. The stock is up about 42% since late October of 2020, compared to a rise of about 34% for the S&P 500: