The global semiconductor shortage has affected companies in an almost unbelievable 169-industries, according to an analysis by Goldman Sachs.  Many have seen short supplies firsthand of most any type of consumer electronics or by driving by the empty lot of a local car dealer.  Readers of The Leadership Matrix know that the tight supply of chips has also resulted in higher prices and highlighted an international tech race.

Despite shortages, the semiconductor industry sold more chips than at any point in history during the second quarter of 2021 (latest available data).  The issue is that increased global demand is outstripping global supply.  Want an example?  The dollar value of microchips in an electric vehicle with a driver assist system is thirty-times higher than the cost of the chips built into a gas-powered vehicle without such a system.  With more vehicles going electric and offering options like driver assist and other comforts, new chip demand will continue to rise.

It would help if more machines were available to manufacture microchips.  Don’t count on it.

This article goes into the dynamics facing the industry and an explanation of how supply shocks and demand spikes during the pandemic, on top of years of growing demand for chips and the tools to make them, has represented “a complete reset of the entire semiconductor supply chain”- and a shortage of the machines that make the chips.

New chip fabrication plants are being built and old machines are being reused.  New ways of finding solutions may also be developed.  Enjoy this read and let me know what you think.

~ Brian Kasal- The Leadership Matrix

Click Here- What’s Harder to Find Than Microchips? The Equipment That Makes Them

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