Consumers around the globe are facing a delay in the delivery of cars, home appliances,
smartphones, and other products due to the supply constraint of semiconductor microchips.
Not only in cars and appliances, but microchips are also used in other products such as laptops
and coffee machines.
Semiconductors are an essential component of electronic devices and are found in almost
everything in the current digital era.
The demand for microchips has increased significantly from the automobile industry.
Microchips are used for computer management of engines, better fuel economy, as well as
for electronic braking and other driver-assistance features.
As a result of the global semiconductor shortage, many auto space players are either halting
or reducing vehicle production.
For instance, Hyundai Motor in Montgomery stopped its production for few days in the
month of June.
Acer, one of the world’s largest laptop manufacturers, is also expected to face challenges
till the first half of 2022 amid microchip shortage.
Why is there a semiconductor shortage?
Like many other challenges, the global semiconductor shortage also began in 2020 after the outbreak
of COVID-19.
The shortage of chips has been triggered by a mix of factors like the pandemic-induced
disruption of the global supply chain and a strong surge in demand for chips.
At the onset of the pandemic, plants were closed, which resulted in a lack of supply
of semiconductors.
Also, with the world transitioning to a work-from-home culture, demand suddenly increased for many
of the devices that depend on semiconductors.
Last year, no one would have ever imagined a spike in personal computer sales after a
steady decline in the sales for more than a decade.
5G wireless network providers also use microchips to provide ultrafast internet services.
The supply was impacted further as Ever Given, one of the world's largest container ships,
was grounded at the Suez Canal and blocked the passage for around a week, blocking major
container ships from Asia to Europe, spiking the chip shortage to the next level.
What’s next?
The impact of the microchip shortage has already been felt by consumers globally.
Anyone planning to buy a new car or seeking a car replacement can expect a waiting period
of up to six to eight months.
Leading computer manufacturers have already warned customers of a price hike.
Retailers, on the other hand, are also expecting a shortage of electronic appliances.
There seems to be no quick fix; chipmakers need to gear up to meet the future demands
and challenges.
Meanwhile, US President Joe Biden has sought $37 billion in funding for legislation to
supercharge chip manufacturing in the country.
Four new factories are expected in the US, including two by Intel Corp and one each by
Samsung and TSMC, to boost
the supply.