Shortage of Chip Production

    Our digital world consists of our imagination and billions of chips that help our imagination become a part of our life. Our imagination created everything around us. You can gamble online at the casino online or talk to people from different parts of the world, or fly to space. All of these are in great need of chips. Every manufacturer’s factory needs chips to produce its products. The more goods you need the more chips are needed. 

    For a brief period, from the end of last year to the beginning of this year, it seemed that the worst phase of the global chip shortage was over. However, geopolitical tensions and new COVID-19 outbreaks again disrupted supply chains. 92 new plants are already under construction, but now there are not enough chips to produce the equipment needed to expand the supply. At the same time, chips are needed in almost every sphere, from cars to smartphones to consumer electronics.

Need More Chips to Build the Factory of Chips

     The global industry association SEMI believes that the chip shortage could last another two years. This will lead to times increasing from 3-4 to 10-12 months.

     During a presentation at SEMICON Southeast Asia 2022, held in Penang, Malaysia, the SEMI President said that 92 new plants will be opened around the world in the next few years. One of their main objectives is to meet the growing demand for semiconductors.

    It will take several years to build and launch, and until then the shortage will not abate. In addition, the industry does not have enough chips to produce the equipment to create them. Earlier, many experts had predicted that the supply situation would gradually improve this year, but the geopolitical problems have dealt the industry another blow.

The Deficit Can Be Turned Into an Oversupply 

       The chip industry is a cyclical sector. This means that in the future the current period of constant shortage will be replaced by a period of oversupply.

       States around the world are also going to invest billions of dollars to expand semiconductor production in their territories. This will help protect against supply chain disruptions such as those that occurred during the pandemic, as well as reduce reliance on manufacturing in Taiwan.

       By far the world’s largest semiconductor market remains the Asia-Pacific region, which accounts for 60 percent of global semiconductor sales. 

       China, Japan, South Korea, and Taiwan have emerged as the “Big Four” due to government support, a large market, and increased R&D spending. Together, they hold four of the top six positions in semiconductors, and each of these countries is home to several global manufacturers.

       The deficit can be turned into an oversupply, it might cause another crisis. Crisis upon a crisis doesn’t look like a crisis but a situation is hard today. Several factories were destroyed in Ukraine. Our desire to digitalize the world can bring us to mass disaster. Don’t forget about our green planet as all borders have no sense for our place of living.

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