Global Chip Shortage !

World has battled a lot of difficulties during past two years due to outbreak of covid-19 which lead to huge shutdowns across the globe and catalysed the shortage of electronic chips which were in huge demand during the pre-covid era as well. Post emergence of covid-19 and in between repeal of lockdowns, the increase in demand lead to further complex situation that arose due to the lack of raw material and huge demand which could last as long as for two years to come.

What is a chip?

A chip is an integrated circuit which is smaller than our fingernail. It consist of interconnected circuits which is imprinted on a tiny plate or slice which is generally made of Germanium or Silicon.  Chips are so advance that it may contain billions of components on such a small surface area and plays a pivotal role in the research and development in the field of modern electronics.

What is the reason?

One of the reason could be the trade war between China and USA while China is the leading exporter of the world’s electronic chip, it would always try to dominate the industry through various tactics.

Drought in Taiwan also caused a severe issue.

What is the impact of Chip shortage?

The IT Industry, The Automobile Industry, The Cloud services providers and the Mobile phone manufacturers are the worst hit section that needs a sudden push with the help of mass production but the chip that works as a brain of all the electronics and automation systems are not available in sufficient number that would eventually hit customers with sudden increase in prices of the finished products.

According to The Guardian’s report, “Even the mighty Apple, a $2tn company and the world’s biggest buyer of semiconductors spending $58bn annually, was forced to delay the launch of the much-hyped iPhone 12 by two months last year due to the shortage.”  This makes it clear about the severity of the situation.

Solutions to the problem!

Though there are no sudden solutions to the existing problems but following may be considered:

Excess supply of raw material

Improve supply chains

Expand capacity

Ease in transportation

Reduce dependency