When Ed Delaney contacted his credit union in early November to get a credit card issued for his wife, he was told it would arrive in about 10 days.

Weeks rolled by and no card. It took until January to learn why: not enough microchips.

Credit and debit card issuers are feeling the full effects of a global semiconductor shortage that has plagued the automobile and technology sectors since chip demand spiked during the pandemic. Now consumers like Delaney, 67, of Spokane, Wash. – who called his credit union repeatedly before the card arrived in early February – are feeling it, too. “It was a major inconvenience to us,” he said.

Wait times of six weeks or more have become common – particularly for credit union members – compared with the five- to 10-day turnarounds seen in the past. And the problem isn’t going away: Patrick Penfield, a professor of supply chain practice at Syracuse University, expects card deliveries will lag throughout 2023, even as manufacturers are projected to produce 3 billion of them this year.

Demand for cards with EMV chips is high: By the end of 2021, 63 percent of U.S. cards carried the distinctive silver or gold squares, according to payment technology standards body EMVCo. From July 2021 to June 2022, chip-enabled cards were swiped in 85 percent of transactions made in the United States, and 92 percent globally. Manufacturers can’t keep up: Lead times for chips now average 20 to 25 weeks, according to Everstream Analytics, which specializes in supply chain risks, compared with a pre-pandemic range of 10 to 14 weeks.

Lewis Black, the chief executive of Toronto-based Almonty Industries, one of the world’s largest producers of tungsten concentrate, a semiconductor component, says the chip shortage was exacerbated by the limited number of factories adept at building them, as well as fierce inter-industry competition, which collectively kicked the credit card sector to the bottom of the priority pile.

“It’s really a perfect storm,” Black said.

A SUDDEN SURGE

Though Europeans have been using chip-enabled credit cards for nearly a decade, Americans are still playing catch-up.

“In the U.S., cash is king – that was how everybody rolled,” Black said.

But that changed during the pandemic as consumers tried to limit contact with people and unsanitary surfaces, he said. The EMV chip was the answer – you could just tap your credit, debit or prepaid card at check-out. The technology also makes transactions less susceptible to fraud.

That coincided with a wave of online shopping, particularly for electronics such as laptops, sales of which surged nearly 40 percent between the second and third quarter of 2020, according to the U.S. Bureau of Economic Analysis. Car sales saw a comparable rebound during that time frame, forcing chipmakers to ramp up production.

Then came the Biden administration’s push for electric vehicles in 2021, which require more than twice as many semiconductors as gas-powered cars. This puts even more strain on an already backlogged supply chain, Black said.

“There’s been no increase in the output of semiconductors but there has been a significant amount of government mandated increase in demands,” he said.

Meanwhile, two decades of consolidation within the chip industry has left only a handful of companies equipped to make this “extraordinarily expensive, extraordinarily advanced” technology, Black said. And “there is literally less-than-what-you-can-count-on-one-hand number of manufacturers who actually have the technical ability to build them and to operate them.”

Even as the Biden administration passed the Chips Act, which in part provides incentives to chip manufacturers to build more factories, the shortages will not be resolved for some time. The Semiconductor Industry Association declined an interview request with The Washington Post.

“These production bottlenecks also affect the delivery times of the credit cards,” Michael Dorner, chief executive of Austria-based information technology company VariusSystems and president of the International Card Manufacturers Association, said in a statement to The Post.

“It will be some time before supply chains fully recover.”

‘THE BIG GUYS GET TAKEN CARE OF FIRST’

In the chip hierarchy, credit cards are at the bottom, Syracuse’s Penfield said. Manufacturers prioritize their high-margin customers first, which means computer and smartphone makers.

“When you look at what they are going to really focus on, or put preference on, it’s those chips that they can make more money on,” he said.

The credit card industry has its own pecking order. Big institutions such as American Express, Chase and Discover told The Post they aren’t experiencing delays in their supply chain. Instead, experts say, it’s credit unions and regional banks that are hurting.

Tiffany Milbrandt, the manager of business development for custom printed card producer CARDSource, said she isn’t surprised that smaller banks are the ones most impacted. Though her company doesn’t use EMV chips, it has been experiencing supply chain delays on other materials used in its gift and loyalty cards.

“The big guys get taken care of first,” she said.

Black noted that card manufacturers can’t risk alienating a big bank or losing a major account.

“Customers have long memories,” Black said. “They won’t remember that you stood by them at this time, but they’ll remember if you don’t. . . . If you don’t supply, say, Amex, there will be somebody waiting in the wings who will.”

But this still leaves people who rely on smaller banks with few options. Some customers have broadcast their frustrations on social media, including a Twitter poster who wrote that they’d been waiting more than five weeks for a debit card from Pentagon Federal Credit Union, which claims 2.8 million members on its website. “They never announced the card issue on their website when applying for a card,” the customer tweeted at PenFed, adding that there’s been no explanation for the delay.

PenFed did not respond to The Post’s request for comment. In tweets responding to customer complaints, the credit union said it was “diligently working to resolve the issue with our card vendor.”

When Karen Lubieniecki, 73, contacted the Bank-Fund Staff Federal Credit Union to order a replacement for a lost card, she was warned the wait could take as much as two months. “That was unexpected,” the Laurel, Md., resident said. “We were taken aback.”

She got lucky; the card came in about a week and a half. Even so, as of this week, customer service reps are estimating wait times of four to six weeks.

A NUDGE TOWARD MOBILE WALLETS

The Teachers Credit Union, which has more than 50 branches in Indiana and Michigan, began advising members about card delays last month. It’s now encouraging members to switch to mobile wallets on their smartphones; even if the card has expired, the digital version will still work.

Black thinks other credit unions should follow suit – it’s an opportunity for them to get a leg up on the bigger banks. Plus, the technology is safer.

“If you steal a phone, it doesn’t mean you can go and buy lunch with it,” Black said.

Replacing a stolen or lost card is more complicated because it requires a customer to cancel it, leaving them without a card number to upload into their phones.

“I think that’s kind of the dilemma,” Penfield said. But banks will have to be creative, such as by sending the customer their new card number ahead of the plastic arriving in the mail. “I think that would be in their best interest. . . . I mean, the cards are just going to get more and more delayed.”

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