HomeTechHow The Chip Shortage Has Affected Industry

How The Chip Shortage Has Affected Industry

Whether it was because of lower production, political sanctions, or the covid pandemic, we have seen a long and protracted shortage in the global chip market. Demand was on the increase, and yet supply just couldn’t keep up, and as such, there were several key global industries that suffered and whose growth has been adversely affected.

The sectors that were most affected


The general consensus is that the chip shortage has affected the automotive industry the hardest. There have been significant losses in the US automotive sector, and many automakers have been forced to simply slow down production or cut back altogether.

The DIY or build your own computer sector simply collapsed

Those that were doing their semiconductor search and then purchasing the odd semiconductor or two for home-based hobbies have been badly affected. You will thus need to know where to find the semi-conductors that you need for the tech-based hobbies that you embark on.

Slowed the rise of the smart home

Most, if not all, consumer electronics and especially those that are now internet-connected and integrated within the home, needed chips to be produced, and just as societal demand for smart home appliances peaked. It has been argued that the tech now exists for most US homes to become smart tech-driven homes, and yet this chip shortage has held back this expected countrywide movement to the smarter home.

Green power

The rise of sustainable power sources, the reduction in battery sizes to store solar, and the ability to contribute renewable energy to the national grid have seen a surge in demand for greener power sources and systems. What was a fast-growing business sector in the US has slowed to a snail’s pace, and growth has fallen off in a major way, and all because these firms no longer have access to all the microchips that they need for production.

The future

Prior to the pandemic, 81% of all microchip production was in Taiwan and South Korea. However, as this was the epicenter of the disease, these were the first countries to shut down, and production slowed to a stop. Although the production has been increased and some big manufacturing concerns have even begun to institute in-house chip production, there is still a shortage, and a growing one at that. Larger companies have begun to stockpile the chips that they need, so as production peaks again, the ability to purchase the components is not universal and equal. 

The only way to work a way through this shortage is to improve overall communication and business planning between suppliers and manufacturers. A more resilient supply chain, access to forwarding planning and logistics data to pre-order, and better international ties and trade will go a long way to dealing with the shortage and ensuring that what is being produced is evenly and fairly distributed around the globe. It should be a matter of principle in that without the humble chip. Society will not be able to achieve its utmost developmental goals.

Denis Ava
Denis Avahttps://bizgrows.com/
Denis Ava is mainly a business blogger who writes for Biz Grows. Rather than business blogs he loves to write and explore his talents in other niches such as fashion, technology, travelling,finance,etc.

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