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Computer chips shortage crisis confuses global electronics industry

Computer Chips Shortage Crisis

Computer chips shortage crisis has affected the world industries in an unprecedented way, causing major confusion in the phones and automobile industries due to the increasing demand on electronics.

Computer chips shortage crisis

In addition, supply chains were confused due to the Coronavirus pandemic; the trade war between a number of countries, led by the United States of America and China; and supply decrease due to the increase in demand for electronics during the pandemic.

Observers say the Coronavirus pandemic had the largest impact on production, since factories were closed, if temporary. However, the high demand was not balanced by the supply required.

This led to a real crisis with an imbalance in supply and demand, especially in light of the high demand for products used in the semiconductor industry while the companies in this sector are no more than ten in the world.

Coronavirus effect

For his part, Neil Mawston, Executive Director of Strategy Analytics, confirmed that Coronavirus pandemic, the rise in stocks due to the trade war, and the shift in working from a distance are the most prominent factors that “caused the shortage of semiconductors.”

Mauston suggested that everything that contains a chip will be affected, such as cars, smartphones, gaming devices, tablets and laptops.

In turn, president of the International Semiconductor Manufacturing Corporation, revealed in an interview during the SEMICON China conference that the world is going through an unprecedented shortage of chips, after the semiconductor sector sales grew by 18% during the year 2020.

He called for more cooperation and more attention to innovation. This is so that the semiconductor industry can manage the challenges it faces.

Samsung CEO explained that the computer chips shortage crisis may continue until the second quarter of 2021.

The semiconductor sector is witnessing great competition, especially in light of the rapid growth in sales of electronic chips worldwide.

34.2% of the sector’s production is distributed on electronic devices, 30.2%, on electronic communication devices, 9.3% on customer electronic devices, 12% on automobile electronic systems, 13.2% on industrial electronics, and 1.1% on civil airspace.

Cars production delay

According to research company IHS Markit, the computer chips shortage crisis could delay the production of about one million cars in the first quarter of this year. Observers believe that it is too early to measure the impact on other sectors.

The severity of the shortage is supposed to decrease during the year, due to vaccination campaigns, which will allow factories to return to the usual pace of production, in addition to establishing new factories.

In a statement, GlobalFoundries considered that the semiconductor sector is at the heart of the global economy, calling on governments to invest and do their part to help bridge the apparent gap between supply and demand.

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