Scarcity of Chips
A global shortage of semiconductor chips, the tiny devices at the heart of every electronics gadget, is having a ripple effect across the wider consumer electronics industry and analysts say the squeeze could last through 2021 and into 2022 given the multiple factors at play.
On March 19, a fire broke out at a factory owned by Renesas Electronics Corp in Hitachinaka, Ibaraki Prefecture, north of Tokyo, damaging 23 machines used in chip production. The unfortunate incident has compounded the chip shortage as the Tokyo-based company commands nearly a third of the global market share for microcontroller chips used in cars, and is the world’s second largest manufacturer of automotive chips after Dutch-based NXP Semiconductors NV.
With the industry yet to digest that blow, another crisis has emerged. This time in Taiwan, where reservoirs are running dry as the island experiences its worst drought in 56 years. The water shortage is expected to deepen an already acute global semiconductor shortage, given the fact that Taiwan is home to some of the world’s biggest and most advanced high-tech foundries, which are extremely water-intensive.
On Monday 10th May 2021, Malaysia imposed a new nationwide lockdown, as the country grapples with a surge in coronavirus cases, which worsened the existing supply chain disruptions as Malaysia plays an important role in the world’s semiconductor manufacturing industry. Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai says the global chip shortage will not be resolved overnight, notwithstanding the aggressive global investments to increase capacity.
The worldwide semiconductor shortage will persist through 2021, and is expected to recover to normal levels by the second quarter of 2022, according to Gartner, Inc. “The semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021