Soon Semiconductor chip shortages have sent shockwaves around the world, affecting most industries and might even harm the global economy soon. Since the era of computers and automation, the demand for semiconductors has increased to insignificant proportions.

What exactly is a semiconductor chip?

A semiconductor is a substance that conducts electricity more than an insulator but less than a pure conductor and is found in thousands of electrical products.

A semiconductor chip is an electric circuit constructed on a semiconductor wafer that contains several components such as transistors and wires.

Where is semiconductor chips used?

Semiconductors are used in thousands of items, including computers, smart phones, appliances, gaming devices, automobiles, and medical equipment.

Major players

·       Intel

·       Samsung

·       Wipro

·       NXP semiconductors

·       TSMC

·       Applied material

·       Qualcom

·       Nvidia

·       Texas Instruments

What caused Semiconductor shortage in the world?

The reason may be traced back to when covid-19 began, when there was a large drop in demand for semiconductors due to reduced demand because of mandated lockdown in practically all parts of the world, which impacted the production process and demand.

As soon as the manufacturing process began, electronic goods makers proceeded to submit orders, resulting in an ongoing backlog to meet the demand for chips from chip manufacturers.

Other reasons that fueled the fire included a storm that briefly halted all manufacturing operations in TEXAS around February, as well as US-China tensions that suspended all foreign companies that use American chip technology to sell to Chinese factories.

Which industries are being impacted by the chip shortage?

Most industries have been disrupted as a result of the semiconductor shortage, which is expected to cause billions of dollars in losses in the near future.

a. Automakers have reduced automobile output;

b. Mobile phone businesses have delayed production; and

c. Gaming companies such as Xbox and PlayStation have cut production to half.

When will the semiconductor industry be able to meet incoming and future demand?

Since the influx of demand, firms have begun producing chips at full capacity, but the damage has been done, and it is likely to recoup in 2-3 years, according to industry analysts.

Some countries have stepped in and implemented steps to increase demand and fill the demand gap that has been created.

South Korea promised a massive $451 billion investment, while the US Senate proposed $52 billion in chip factory subsidies.

Tata Group Chairman N Chandrasekaran stated on August 9, 2021 that the Tata Group is aiming to enter semiconductor manufacturing and has established a business to capitalise on the opportunity.

The Ministry of Electronics and Information Technology intends to reform its policy framework, in which the government would take a more active role in expanding the sector by luring more private businesses and giving early money to help India become a worldwide semiconductor hub.

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