If you’re having a hard time buying a PS5, the global semiconductor shortage is probably to blame. A shortfall of the little chips is slowing down big industries.
Whether we’re talking consumer electronics, cars, medical devices, airplanes, smart appliances or wearables, their common component is chips.
The coronavirus pandemic has changed consumer behaviors. We’re buying personal computers, new phones and tablets, so we can work from home. And to cope with the lockdowns, companies are continuously upgrading their digital infrastructure to enable remote working. All these purchases are driving up the demand for chips. At the beginning, a pandemic came with an estimated economic downturn and industries such as automakers slashed chip purchases. But the economy in East Asia bounced back sooner than expected with more demand for cars. And most carmakers keep limited inventory. So right now, they’re buying.
So as the coronavirus crisis reshapes supply and demand, chip companies are scrambling. And if there’s an industry that can’t simply ramp up production in a hurry, or ask clients to do without their product for a while, or shift around parts of their manufacturing rapidly, it’s the chip industry.
Here’s a look at how chips became the “oil of the digital age” – and the geopolitical complications surrounding their supply.
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