In this video, we break down the factors behind the ongoing global chip shortage.
The chip shortage has affected a wide range of business sectors, delaying shipments of Sony’s new PS5 games console, and restricting the supply of TVs and other OLED displays. The automotive industry has also been hit particularly hard, with production lines around the world having to close for weeks at a time due to a lack of components.
Essentially, the shortage of chips was prompted by the Covid-19 pandemic and the surge in demand for electronics. Consumers and businesses started buying new laptops and servers to cater for staff working remotely and children being home-schooled. So, whereas worldwide semiconductor sales declined between 2018 and 2019, in 2020 sales grew 6.5 per cent, with this rapid growth continuing in 2021, with the result that manufacturers are struggling to keep pace.
But the pandemic has also exposed pressure points in the global chip supply chain, with the vast majority of manufacturing being carried out by two companies – Taiwan’s TSMC and South Korea’s Samsung. Meanwhile, the worst drought in Taiwan in 50 years has left TSMC and other manufacturers struggling to secure sufficient quantities of water, which is crucial in chip manufacturing.
Other events that have held back chip supply include fires in factories, power outages and the transportation blockage at the Suez Canal.
View the original video here.
Good Living is the Cyprus Mail’s portal of curated content from across the internet, showcasing local and global ideas, cultural highlights, and scientific and technological developments to inspire a sustainable life.