At the nucleus of advanced civilization, chips, called semiconductors and microchips, are the brains of today’s electronics. The rapid acceleration of the “internet of things,” and the future before it, has launched these tiny little chips ahead of oil and gas as the world’s essential commodity for input and growth. With an already fragile supply chain, the demand for chips skyrocketed as the pandemic shut down the global economy, leading to delays that may linger for a year or more. 

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An American invention, chips—minute wonders that host billions of transistors within them—bring to life almost everything in modern society…Twenty-five years ago, 37 percent of chips were manufactured in the U.S. Today, that number is only 12 percent…

There appears to be no end in sight to the issues facing chipmakers. The COVID-19 pandemic forced many factories to halt production…As society moved to remote electronic communication, the pandemic-driven lockdown increased demand for consumer electronics and caused a ripple effect up the supply chain…The situation has led Patrick Penfield, a professor of supply chain practice at Syracuse University, to declare: 

“Right now, we have a global supply chain in crisis. We’ve just never seen anything of this magnitude impact us before.” …

The current need for chips is so great that manufacturers are unable to make enough chips to meet it at this time, suggesting consumers will soon be seeing higher prices for fewer goods. Making matters worse, approximately 90 percent of the world’s electronics travel through China’s Yantian port. COVID caused the port and other ports in Asia to close…

Before that, in 2018 and 2019, the trade wars between the U.S. – China, and Japan – Korea caused market turbulence for chipmakers. The trade wars added to mounting concern over the consequences geopolitical conflicts had on manufacturing and distribution…

In the second half of the pandemic, as consumers avoided public transportation and sought more customized vehicles, the automotive industry experienced a significant increase in demand…According to Lewis, in an effort to allow chip companies to shift and make chips for consumer products, automakers like Ford, Volkswagen, and Toyota cut production when the industry was about to rebound. This move led to a shortage of car chips…

Although not the leading cause, Taiwan’s tense relationship with China plays a role in the current chip shortage. With Taiwan driving the world in chip production, the potential for military conflict between the two nations “puts American access to the chip industry in potential jeopardy, and could be catastrophic for many industries…”…

Meanwhile, the White House reported in April that the Biden administration’s $2 trillion infrastructure bill includes $50 billion for semiconductor production and research.…

Presently, opinions vary on when the shortage will end, but most agree it will easily drag well into 2022…

Have you been affected by the microchip shortage in one way or another? Share your comments and prayers below!

(Excerpt from Undercoverdc. Article by Michelle Edwards. Photo Credit: Sahand Babali/Unsplash).