Why the World Is Short of Computer Chips, and Why It Matters

Summary

This article makes the following points:

• Covid-19 pandemic affected the availability of computer chips. 
• Working from home resulted in an increased demand for smart devices.
• Devices needed to be easily connected and reliable.
• Demand for video and gaming increased demand for chips.
• Homeworking resulted in companies such as Apple, Qualcomm and Nvidia ramping up production.
• Covid-19 resulted in a plunge in car sales.
• Demand for cars soon picked up.
• Modern cars use a lot of computer chips.
• Taiwan and S Korea are the biggest producers of computer chips.
• Fire and power outages at semiconductor foundries affected supply.
• Tensions between the US and China has contributed to the low global availability.
• Chip production dominated by companies based in Taiwan and S Korea, such as Taiwan Semiconductor Manufacturing (TSMC).
• Over-reliance on Taiwan and S Korea has highlighted strategic vulnerabilities regarding production, intellectual property, and access.
• China is stockpiling chips.

References

• Jun 2021 The Verge The chip shortage will likely get worse before it gets better
• Jun 2021 Finabel The Shortage of Semi-Conductors and its Strategic Implications

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