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Global Chip Shortage

About Global Chip Shortage

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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

Tata Motors, a leading SUV player, has said it continued to be "agile" and was monitoring situation

Updated On: 03 Apr 2023 | 11:09 PM IST

China's reliance on semiconductor imports is unlikely to diminish over the medium term given constraints on its advanced chip production

Updated On: 18 Jan 2023 | 6:03 PM IST

The passenger vehicle dispatches to dealers increased by 11 in July as improvement in semiconductor supplies helped the companies to ramp up production ahead of the festive season, SIAM said.

Updated On: 12 Aug 2022 | 1:08 PM IST

Operators want eSIMS to be made mandatory while phone makers say this will push up costs

Updated On: 10 Aug 2022 | 11:39 PM IST

Hyundai Motor and its affiliate Kia said on Wednesday their combined sales in the United States fell 11 per cent last month from a year earlier amid the prolonged global chip shortage.

Updated On: 03 Aug 2022 | 10:59 AM IST

Hyundai reported sales of 50,500 units in the domestic market (up 5.1 per cent YoY), against 48,042 units a year ago

Updated On: 02 Aug 2022 | 12:32 AM IST

Fresh chip scarcity may result in 4th straight year contraction in volumes

Updated On: 01 May 2022 | 11:57 PM IST

Shipments of Maruti Suzuki and Bajaj Auto vehicles see record jump

Updated On: 02 Apr 2022 | 2:01 AM IST

No significant global player has participated in the first round of the investment incentive scheme

Updated On: 26 Feb 2022 | 6:04 AM IST

The Vedanta Group had in January shared its intent to invest $15 billion for making displays and semiconductor chips in India over the coming five years

Updated On: 15 Feb 2022 | 3:38 AM IST

It is optimistic of being a net debt-free company by 2024

Updated On: 01 Feb 2022 | 1:08 AM IST

The massive 50% surge comes from additional requirements for online learning and WFH; however, demand outstrips actual growth due to chip crunch

Updated On: 24 Jan 2022 | 10:00 PM IST

The auto industry body expects current quarter to be better but stops short of sharing any guidance owing to pandemic related uncertainties

Updated On: 14 Jan 2022 | 11:43 PM IST

'There is a huge demand for chips from automobiles, electronics, railways, the defence industry, power electronics amongst others', said Vaishnaw

Updated On: 23 Dec 2021 | 6:10 AM IST

Vaishnaw said the government is offering global players something competitors cannot match and that is brain power

Updated On: 20 Dec 2021 | 6:02 AM IST

Market-share loss in SUVs, supply disruptions, and margin improvement may take time to repair

Updated On: 20 Dec 2021 | 3:37 AM IST

States hold key to success of semiconductor incentive plan

Updated On: 16 Dec 2021 | 11:06 PM IST

Domestic fabless players to get support via design-linked incentive

Updated On: 16 Dec 2021 | 1:46 AM IST

Qualcomm projects that some demand-supply equilibrium may be achieved by early 2022, but shortage in automobile sector may last longer

Updated On: 28 Oct 2021 | 6:08 AM IST

MSIL Chairman R C Bhargava said at 80.4 per cent of net sales, material costs stood at an all-time high at the end of the September quarter

Updated On: 28 Oct 2021 | 12:57 AM IST