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Recent Chip Crisis and Its Impact in Major Industries – Importance of Chips in Industries

Semiconductor chips widely now as the new oil or gold are made of silicon, which is a strong electrical conductor.  These chips are incorporated into microcircuits, which power wide range of contemporary electronic products and components.  These semiconductor materials are used in all active components, integrated circuits, microchips, transistors, and electronic sensors.  With technological advancements in many industries, semiconductors are literally the “heart” of billions of goods ranging from cell phones, data centres, computers, laptops, tablets, smart devices, automobiles, home appliances, life-saving medicinal devices,  Agri-tech, ATMs, and more.

Semiconductors allow critical tasks such as high-end computing, operation control, data processing, storage, input and output management, sensing, wireless connectivity, and more.  As a result, these chips are essential to all upcoming technologies such as artificial intelligence, quantum computing, enhanced wireless networks, blockchain applications, 5G, IoT, drones, robots, gaming, and wearables.  Semiconductors chips are low-cost components used in the production of contemporary technology goods and components.  Simply stated, semiconductor chips are the foundation of contemporary computing.

Now, the recent chip shortage has caused widespread concern as enterprises across the globe struggle to satisfy increasing demand per the market intelligence.  A small chip that costs just a few dollars was a crucial component for practically all goods in today’s technology-driven world, and its supply shortage has resulted in billions of dollars in losses for big corporations across the world.  Despite increasing demand for such items, a severe scarcity of semiconductor chips utilized in the manufacture of a variety of goods such as electronic devices, cars, cell phones, and other gadgets has resulted in losses.  The worldwide chip supply crisis, which began immediately after the pandemic in 2020, has worsened in recent months, with major businesses across many sectors failing to satisfy increasing demand for electronic products and components.

According to Goldman Sachs’ research, the worldwide chip supply shortfall has affected at least 169 sectors.  With no solution in sight until at least 2022, all countries across the globe face a huge challenge.  It has already begun to influence major economies such as the United States.  The crisis started after the epidemic, and the pandemic is not the only cause of the crisis; in reality, the pandemic is just the spark that ignited the fire.

What are its impacts.  According to market research Prices for many devices that need a semiconductor will undoubtedly rise.  In April, 13% of vehicle buyers spent more than the sticker price, compared to 8% in 2020.  The auto industry is taking a beating, with projections predicting that US automakers would produce 1.5 to 5 million fewer vehicles this year.  Ford and GM have already restricted output.  To maintain production levels, Tesla updated its own software to accommodate other processors.  while the supply crunch’s effect is extending to consumer technology Apple CEO Tim Cook warned that a shortage of chips might harm iPhone sales.  Microsoft is having difficulty producing enough Xbox consoles and Surface computers.  Elon Musk said that a chip shortage would limit Tesla’s ability to produce about half as many Powerwall home batteries as it believes it can sell.

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