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What are Global Chip Shortage?

Global Chip Shortage

About Global Chip Shortage

What are Global Chip Shortage?

What is a semiconductor?

Semiconductors are silicon chips that cater to control and memory functions in products ranging from automobiles, computers and mobile phones to various other electronic products and appliances. 
 
Globally, the utilisation of semiconductors in the automotive industry rose in recent times with new models launching with advanced electronic features such as Bluetooth connectivity and driver-assist, navigation and hybrid-electric systems.
 

2020–21 global chip shortage explained

In nearly every electric product, there are semiconductor chips. Some of the items are smartphones, cars, electric toothbrushes, washing machines, refrigerators, etc. However, these appliances and products are now in critically short supply. 
 
The coronavirus pandemic-induced lockdowns temporarily disrupted the shipments of semiconductor chips (also known as integrated circuits), amid a massive rise in the global demand for PCs, laptops, mobile devices in response to online learning and remote working. 
 
Global semiconductor chip shortage triggered a major delay in manufacturing activities, with automobile companies cutting down on production and electronic device makers struggling to keep up with a pandemic-led surge in demand for phones, TVs and gaming consoles. The shortage of semiconductors stalled production across manufacturing industries, especially in the auto sector.
 
The semiconductor chips are so much in demand that manufacturers are finding it difficult to produce enough chips causing a huge spike in prices.
 
Since the beginning of shutdowns in 2020 across the globe due to the outbreak of the Covid-19 pandemic, the total demand for chips surpassed the supplies due to the closure of chip-manufacturing units in various parts of the world. 
 
The global chip shortage impacted more than 169 industries, leading to disruption in production across an array of products, including vehicles, laptops and mobile phones.
 
In fact, the Covid pandemic, the China-United States trade war and the Taiwan drought are a few primary causes for the global chip crunch.
 
In September 2021 quarter, semiconductor chip inventories ran low across the most crucial sectors around the world. Input shortages and low inventories led to production cuts and delayed shipments. The worst-hit carmakers faced stiff competition from the sprawling consumer electronics industry for chip deliveries.
 
According to the semiconductor manufacturing majors, there is not much return on investment (ROI) to build foundries to meet the demand by the automakers.
 
"The global chip shortage is likely to stretch into 2023 in areas where capacity expansion is slow to catch up with consumer demand", experts said.

Latest Updates on Global Chip Shortage

Semiconductor chip shortage may derail automakers FY24 production plans

4 min read Last Updated :Apr 03 2023 | 11:09 PM IST
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Geographical diversification of chip manufacturing to happen: Moody's

2 min read Last Updated :Jan 18 2023 | 6:03 PM IST
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Passenger vehicle dispatches rise 11% in July as chip situation improves

2 min read Last Updated :Aug 12 2022 | 1:08 PM IST
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Mobile operators and device manufacturers clash over SIM shortage

4 min read Last Updated :Aug 10 2022 | 11:39 PM IST
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Hyundai Motor, Kia's US sales fall by 11% amid global chip shortage

1 min read Last Updated :Aug 03 2022 | 10:59 AM IST
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Auto sales show positive trends in July as global chip headwinds ease

3 min read Last Updated :Aug 02 2022 | 12:32 AM IST
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Auto industry fails to pick up pace as chip shortage hurts production

3 min read Last Updated :May 01 2022 | 11:57 PM IST
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Car, two-wheeler exports soar in FY22 amid chip crunch, falling rupee

3 min read Last Updated :Apr 02 2022 | 2:01 AM IST
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India's tryst with semiconductors: Govt plans to rope in global bigwigs

6 min read Last Updated :Feb 26 2022 | 6:04 AM IST
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Vedanta signs up with Foxconn to manufacture semiconductors in India

3 min read Last Updated :Feb 15 2022 | 3:38 AM IST
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Tata Motors narrows Q3 losses quarter-on-quarter as chip shortage eases

3 min read Last Updated :Feb 01 2022 | 1:08 AM IST
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PC, laptop demand on the rise but chip shortage a cause of concern, says HP

3 min read Last Updated :Jan 24 2022 | 10:00 PM IST
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Chip crunch, pandemic, high costs drag Dec qtr auto sales to multi-year low

3 min read Last Updated :Jan 14 2022 | 11:43 PM IST
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Enough demand in India to take care of 5-6 fab plants: Ashwini Vaishnaw

3 min read Last Updated :Dec 23 2021 | 6:10 AM IST
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Govt's policy to build semiconductor ecosystem improves on earlier attempts

7 min read Last Updated :Dec 20 2021 | 6:02 AM IST
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Near-term worries likely to keep Maruti Suzuki's stock under strain

4 min read Last Updated :Dec 20 2021 | 3:37 AM IST
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A good initiative

3 min read Last Updated :Dec 16 2021 | 11:06 PM IST
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Govt's Rs 76,000-cr plan to woo chip makers, create semiconductor ecosystem

6 min read Last Updated :Dec 16 2021 | 1:46 AM IST
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Chip shortage may last up to two years, say Qualcomm and Intel

3 min read Last Updated :Oct 28 2021 | 6:08 AM IST
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Maruti Suzuki Q2 net profit skids 65% to Rs 475 cr as chip shortage hurts

3 min read Last Updated :Oct 28 2021 | 12:57 AM IST
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