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Global Chip Shortage Pressured the West to Reconstruct Supply Chain

Popular Chinese technology news site CNBeta recently reported that a global chip shortage has intensified since the end of last year and has heavily impacted most of the major automobile manufacturers across the board. The British market research firm IHS Markit expected that, for the first quarter of this year, around one million automobiles will suffer delivery delays due to a car chip shortage. Analysts expressed the belief that the imbalance of supply and demand that the pandemic brought about was the main cause of the semiconductor shortage. The stay-home orders created a large wave of chip demand on personal computers, cellphones, game stations and other consumer electronic products that shifted chip production from automobiles to home devices. The recent fire at the Japanese chipmaker Renesas and the extreme weather in Texas contributed to the chip shortage as well. This trend is pushing the U.S. government and the European Union to start investments in domestic semiconductor manufacturing capabilities. Intel just announced a US$20 billion investment in Arizona for a new factory. Even South Korea, as one of the world’s biggest chip exporters, is forming an alliance with Samsung, SK Hynix and Hyundai to expand its domestic car chip manufacturing.

Source: CNBeta, March 31, 2021