Why Chipmakers Cannot Quickly Fix the Global Semiconductor Shortage

Why There is No Quick Fix for the Chip Shortage

Since it began late last year, the global chip shortage has caused temporary mass layoffs and worldwide semiconductor availability constraints. It has also prompted world leaders to call for major federal funding intervention into their domestic electronic components industries.

Despite its destabilizing impact, researchers believe the microelectronics crunch will persist into 2023.

An obvious question arises amid all that disruption: why aren’t chipmakers fabricating more components to correct the imbalance between supply and demand? After all, a couple of large OEMs quickly made 80,000 ventilators to help the U.S. government combat the coronavirus pandemic.

The truth is most leading semiconductor companies and foundry service providers are running their factories at full utilization. Plus, many corporations are investing heavily to expand production capacity with new assembly lines and factories as soon as possible. The problem is fabricating electronic components and establishing new manufacturing sites are complicated and extremely expensive.

In addition, the complex structure of the semiconductor industry and the sharp uptick in demand that followed the COVID-19 outbreak make quick fixes impossible. However, there are signs the chip sector will emerge from the current crisis stronger than ever before.

Download this white paper and discover how large corporations and national governments are trying to resolve the global chip shortage, and how the complex nature of the semiconductor industry means there is no quick fix for the global crisis.