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The reduction in the supply of semiconductor chips worldwide due to the epidemic has increased the economic and geopolitical tug of war. Another company is fighting suppliers, while countries like the US are threatening to produce it at home. Impact on consumers due to increase in prices, companies also suffered the loss of chip shortage has started to affect the production of smartphones, computers, telecom equipment, vehicles, and household electronic goods. The price of many products, including cars, has started rising. Carmaker Ford Motor has estimated a loss of two billion dollars in profits due to chip shortages.
Samsung, Intel, and Taiwan Semiconductor Manufacturing Company have warned of chip shortages throughout the year. A semiconductor is a half-billion-dollar industry. Alam is that even a slight delay in supply from Taiwan’s Foxconn Technology Group or Taiwan Semiconductor Manufacturing Company alone can halt global production.
Due to low profits in this industry, large producers have been reluctant to invest in making these chips to protect them. It takes billions of dollars to build a 5 or 7-nanometer chip. People with special skills and factories required. Factories remained closed in the epidemic and now the demand chain started rising, the supply chain came under pressure. The world is so dependent on some chip makers that large industries are being affected by the closure of a factory.
Officials from Intel, Avidia, Qualcomm, Verizon, and other manufacturers are seeking federal funding to deal with the current situation. Meanwhile, the US government is also in talks with companies like Ford to improve the supply chain.
Experts say that with the help of global shipping and information technology to meet the demand, companies can complete different stages of production of Chip if the private sector is ready for it. Will have to come forward.
We must not forget that supply chain management is an issue of national security. The US Department of Defense itself has struggled to establish suppliers of chips. The complete reliance on foreign manufacturers for some chips also weakens the country geopolitically.
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