The pandemic has resulted in a shortage of semiconductor chips for the past year affecting the production of cars, home appliances, and more. Even though there are signs of production constraints loosening for semiconductors, experts think it will take another year for shortages to fully ease. At the beginning of the pandemic, chipmakers slowed down production as auto manufacturers expected a reduction in demand.
Demand quickly came back in late 2020, which started the imbalance of supply and demand. Semiconductor chips also require lots of water to produce and the summer drought in Taiwan affected production. The island has the Taiwan Semiconductor Manufacturing Corporation, which is the world’s largest chip maker.
Chipmaker Texas Instruments also experienced issues as a winter storm hit Texas in February. The chip market also had to deal with a fire in a chip factory in Japan and U.S. sanctions against a Chinese chipmaker. All these factors led to inflated prices and shortages for all the products that need semiconductors.
For more information about the source click HERE