Crisis of shortage of electronic chips

The global shortage of computer chips is unprecedented in the history of modern technology. The crisis makes it difficult for consumers to find basic items such as smartphones, home appliances, etc.
An increasing number of manufacturers around the world are finding it difficult to secure supplies of semiconductors, causing production and delivery delays, raising concerns about the potential for commodity prices to rise. with consumers.

The global chip shortage could last until 2023. (Source: Nikkei) Came in by surprise The Covid-19 pandemic was the first to cause the global economy to fall into recession last year, disrupting supply chains and changing consumer shopping patterns. So, to cope with the pandemic, automakers are forced to cut chip orders in 2020, while chip manufacturing companies also reduce production activities. But the rapid recovery and mis-predictions of car buyer demand have caused automakers to rush to place orders in large quantities. Meanwhile, the supply of semiconductor chips is not enough. In addition, the US government’s sanctions on Chinese technology corporations, plus consumers who bought many laptops, game consoles and other electronic products during the pandemic led to Inventory is getting smaller and smaller. Although computer chips are not very complicated or expensive, they are an integral part of making electronic devices and household items. Shortages are getting worse, spreading from the car industry to the consumer electronics market. Estimates by the US-based Semiconductor Industry Association say about 75% of global manufacturing capacity is in East Asia, led by TSMC (Taiwan) and Samsung (Korea). U.S. semiconductor companies account for 47 percent of global chip sales, but only 12 percent of global output is produced here. The shortfall is due to Asian companies investing too little in 8-inch chip factories. These companies have struggled to ramp up production as demand for 5G phones and laptops grew faster than expected. Qualcomm Inc, Samsung’s smartphone chip maker, is one of the major chipmakers struggling to keep up with consumer demand. Apple’s main supplier Foxconn also warned about the lack of chips affecting the supply chain for customers. Widespread impact The chip crisis hit the car industry first, especially on the productivity and sales of big companies like General Motors, Ford and Volkswagen. According to market research firm IHS Markit, the shortage of electronic chips affected the production process of 1.3 million cars and trucks worldwide in the first quarter of 2021. The company’s report also shows that the Renesas chip plant fire in Japan in March, as well as disruption to chip factories due to severe winter weather in Texas, will cause shortages. becomes serious. Last month, the British mini-car maker said it had suspended production lines for three days because of chip shortages. Recently, Ford also warned that the number of products is at risk of falling to 1.1 million vehicles this year. At the end of last year, the impact of the chip shortage crisis spread to consumer electronics. Last month, Apple’s financials indicated that the company would suffer losses of between three and four billion dollars in the first two quarters of the year, with the biggest impact on Mac and iPad products. Recently, Chinese technology giant Xiaomi increased the prices of some TV models, citing the fact that the price of key components increased higher than before. Meanwhile, two electronics groups Samsung of Korea and Sony of Japan also simultaneously increased product prices. In addition, the crisis has begun to affect China’s home appliance manufacturing sector. The world’s largest maker of home appliances, Midea Group, said the price of chips used to make home appliances would soar if the global chip shortage persists. The biggest impact from the chip crisis is still consumers. While demand for consumer electronics and automotive items tends to be quite price-sensitive, a reduced supply can increase the price of affected items by 1-3%. This could temporarily boost inflation later this year. Chip pressure has pushed up car prices in the US. New prices averaged $37,200 in the first quarter, up 8.4% year-over-year. Meanwhile, production disruptions due to chip shortages will continue. CEO of chip maker Infineon (Germany) Reinhard Ploss estimated that it will take about two years for chip supply and demand to be balanced. THIUY VUY (according to SCMP/Reuters)