THE Chip Shortage
The global semiconductor chip shortage – what it means for you.
The global semiconductor chip shortage has been making headlines by causing widespread disruptions and delays for businesses across multiple industries.
But what exactly is causing this shortage, and how is it affecting businesses?
In this blog post, we will explore the root causes of the global chip shortage, its impact on various industries, and what companies and governments are doing to address it.
Why is there a global shortage of semiconductor chips?
Semiconductor chips are essential components in electronic devices, such as; smartphones, laptops, and cars. The chips are responsible for conducting electricity and controlling data flow within devices. The global chip shortage began in 2020 due to increased demand for electronic devices as more people spent time at home. Another main factor in the chip shortage was the COVID-19-related shutdowns of factories in China, which disrupted the supply chain.
The increased demand for electronics led to a shortage of parts for electronic manufacturers, which has resulted in a backlog of orders.
How has the semiconductor chip shortage affected businesses?
The chip shortage has affected automotive and electronic manufacturers through plant closures, production line shutdowns and redundancies due to reduced output.
The global semiconductor shortage is causing significant impacts on businesses. Some face prolonged waiting times for crucial electronic devices, from laptops and smartphones to printers and copiers, disrupting the running of their business.
What is happening to reduce wait times?
Semiconductor chip manufacturers have invested in new factories and technologies to increase production capacity.
For example, Intel plans to invest £14.5 billion to build two new chip factories in Arizona, USA, to increase production output.
TSMC (Taiwan Semiconductor Manufacturing Company) also plan to invest £72.7 billion over the next three years to expand its production capacity.
The UK government has pledged £2.5 billion to support the development of the semiconductor industry. The support includes the construction of new factories, expanding existing ones, and research.
Manufacturers are now diversifying their supply chains to reduce their dependence on certain chip suppliers.
For example, Apple is reportedly developing a custom-designed chip for their products to reduce reliance on third-party suppliers.
Conclusion
To summarise, companies and governments are taking steps to address the chip shortage, such as increasing production capacity, offering incentives, and diversifying supply chains.
These efforts will help mitigate the impact of the shortage on businesses and reduce wait time for customers.