The global chip shortage is an ongoing crisis taking place all over the world in which the demand of ICs (Integrated Circuits) is greater than it’s supply which is impacting more than 160 industries. It has led to a major shortage and chaos among the consumers for buying the chips for video cards, electric appliances, microcontrollers etc.
Causes of Global Chip Shortage :-
The causes of Global chip shortage is a combination of different reasons such as COVID 19 pandemic, US-China Trade war & Taiwan drought. All the reasons combining together had a huge negative impact on the supply chain of Chips which resulted into the price of existing Chips to go higher which was never imagined.
LET’S DISCUSS IN DETAILS
- COVID 19 PANDEMIC – During the COVID 19 pandemic people were staying home and buying essential electronics appliances such as Laptops, tablets, smartphones, webcams to get in touch with their loved one’s and to stay connected for their official needs, which resulted into a sudden growth of computer sales to go up by 26% over the previous year.
- CHINA-US TRADE WAR – In 2020, the United States government placed restrictions on Semiconductor Manufacturing International Corporation (SMIC), China’s biggest chip manufacturer, which made it harder for them to sell to companies with American ties. These restrictions forced companies to use other manufacturing plants like Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung. However, these companies were already producing at maximum speed.
- TAIWAN DROUGHT – In 2021 Taiwan experienced it’s worst ever drought which resulted to lead problems for its chip manufacturers which use large amounts of ultra pure water for cleaning their factories.
IMPACTED INDUSTRIES
- Microcontroller Manufacturers
- Video Card
- Gaming Console
- Cars