InvestorQ : Hi, I hear a lot about this chip shortage in the world? Can you tell me what caused this chip shortage?
prachi Patwardhan made post

Hi, I hear a lot about this chip shortage in the world? Can you tell me what caused this chip shortage?

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sara Kunju answered.
8 months ago
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The world is seeing a tremendous shortage of semiconductors or chips in the last few months. Chips are the brain behind every possible mobile, smart phone, notepad, PCs, laptops, gaming console, washing machines, cars and a lot more. The lockdown led to sharp rise in demand for PCs, laptops, smart phones as well as gaming consoles. Cars are getting smarter needing more chips. China has also been hoarding chips, fearing US sanctions.

Supply is also an issue as it takes time. A Fab unit to make chips entails billions of dollars in investment precision of a very high order. A 10% rejection is almost like 100% precision, so there is huge spend on R&D and capex. You cannot just create chip capacity and it takes 2-3 years to set up with all global chip factories running to capacity. It looks set to continue.

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