Chips, also known as semiconductors, are basically the brain in every electronic device. Everything electronic, ranging from remotes to state-of-the-art military planes, rely on these devices to operate. Despite their great utility in the modern world, there is an acute shortage of these components, which has been spelling doom and threatening to jeopardize global markets’ productivity.
Over the past few decades, the demand for computerized vehicles has increased. Modern vehicles’ production relies heavily on chips, including the creation of cooling systems, fuel-efficient engines, and essential safety features like driver assistance. As such, chip scarcity has and will continue affecting the production of high-end cars.
Most car manufacturers have resorted to producing less profitable vehicles. Such include the GMC and Ford Motor Company, which are among the USA’s most prominent vehicle producers.
The entire electronic industry faces significant delays in producing essential gadgets like alarm bells and smoke detectors. The entertainment industry hasn’t been spared either; there has been delayed release of new devices like smartphones, gaming consoles, and televisions. Chip shortage has caused companies like Apple and Samsung to delay their phone production for a few months. Lack of enough semiconductors has also seen consumers scrabble for PlayStation 5 as the company produces fewer gadgets than their current market demands.
Generally, the electronic industry has been affected by chip scarcity and suffered a significant loss of revenue, a situation that’s deteriorating by the day.
What Triggered Chip Shortage in the Basic Electronics and Automobile Industries?
Due to Covid19 lockdown rules, people began stocking up on gadgets. In response, chip-making companies redesigned their factories to satisfy the electronics markets, which generate more revenue than the automotive industry. When the automakers resumed business, they found a major shortage of automotive chips. This saw a new level of demand with which manufacturers couldn’t keep up.
The delayed supply of chips appears sufficiently contained so far, with the vehicle and electronic manufacturers taking on the brunt of the issue. However, if the Covid 19 outbreak continues to drag the economy down, regular shoppers will start feeling the chip shortage’s effects firsthand. Also, more industries could be affected in the near future.