KUALA LUMPUR, July 28 ― The global semiconductor chip shortage, which started last year, would continue to plague certain industries for the rest of the year, said Moody’s Analytics.
In its analysis titled ‘What to Expect: Semiconductor Chip Shortage’, Moody’s Analytics said supply would likely be tight going into 2022.
It said the shortage was, among others, due to different generations of chips produced by manufacturers, as well as trend toward remote work that has led to increased in demand for electronic gadgets that require newer-generation chips.
“The manufacturing process for each generation of chips is incredibly intricate, meaning that generating new supply for any chip generation is challenging.
“And because chips from different generations are manufactured differently, building new plants that focus on certain chips may only alleviate the shortage for consumers of those chips, and not necessarily alleviate the shortage for the market as a whole,” it said.
Cars, in particular, use chips from older technology for which less new supply is coming on line.
Each car requires thousands of chips, compared with phones or other electronic gadgets that require only a handful of newer-generation chips.
Moody’s Analytics said the pandemic has accelerated the digitisation of both the workplace and the home, therefore demand for all kinds of electronic gadgets has skyrocketed.
It also said cloud computing and gaming have boomed due to increased remote activity both in the workplace and at home, and they require newer-generation chips.
It noted that government policy would increasingly play a role as more and more governments view chips and technology dependent on them as matters important for safeguarding national security.
“We expect recent efforts by certain governments in North America, Europe and Asia to increase production and create localised supply chains to expand further, particularly as the pandemic continues to create bottlenecks for the global supply chain to operate efficiently,” it added. ― Bernama
