Global Chip Shortage is strengthening US Manufacturing

Listen to this article

Various reports have indicated that a worldwide chip shortage issue amid the Covid-19 pandemic has transformed into a years-long disruption of electronic items and appliances. Product shortages created problems for the most impressive exercise of consumer power during the American holiday shopping season. So, you aren’t the only one who experienced problems in buying a game console or a laptop. The shortage is leading the tech industry and politicians to try to reverse the United States’ waning importance in the microprocessor business. The US government isn’t happy with how reliant the country’s economy and military are on Asian high-tech manufacturing. Moreover, the chip shortage is shining a new spotlight on US manufacturing and how much of it has moved out of the country.

It is important that Intel has slipped to third place behind Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Foundry. Intel’s US government relations official, Al Thompson said, “We don’t want to create a situation where the United States, which created the semiconductor industry and Silicon Valley, would be completely dependent on other nations for that product”. The chip industry’s new course is part of what some call the decoupling, which at least to some degree is pulling the Chinese and US economies apart. No one expects supply chains without links overseas, but the chip shortage response definitely has a nationalist flavor. Asian manufacturers aren’t standing idle as Intel invests in capacity increases. TSMC said it will invest between $40 billion and $44 billion in new chip-making plants and equipment in 2022.

However, the Covid-19 pandemic and many shock waves traversed the world’s economy. Demand for work-from-home technology like PCs, tablets, and webcams increased beyond the semiconductor manufacturing industry’s ability to supply chips. The issue is not just the big CPU brains of a laptop but also the host of supporting chips required to produce things like dishwashers, baby monitors, and LED light fixtures. The chip shortage soon extended beyond remote work and school needs to home entertainment products like tablets, game consoles, TVs, and graphics cards for gaming PCs. The Covid-19 lockdowns led automakers to put chip orders on hold. Those companies rely disproportionately on cheaper processors that don’t require cutting-edge chip-making technology. The chip shortage has hit cameras, microwave ovens, TVs, pacemakers, washing machines, and more.