In-Depth | The Semiconductor Shortage: What caused the supply crunch and how long will it last?

September 25
22:56 2021

Production of laptops, tablets, smartphones and other electronic devices has been impacted by the shortage of semiconductors.

During a post-earnings call with analysts, Apple CEO Tim Cook had said that “supply constraints will hurt sales of iPads and iPhones. Cook said the shortage is not in high-powered processors, but “legacy nodes,” or chips that perform functions like driving displays or decoding audio, which can be manufactured using older equipment.

Cisco’s new President for India and SAARC, Daisy Chittilapilly recently told Moneycontrol that the issue of chips shortage is “very real”.

“We were one of the early companies which started putting out warnings, as early as the beginning of the year, saying that the semiconductor issue is very real and it will be a while before we come out of it,” Chittilapilly said.

“We tell our partners and customers very transparently that we are heading into trouble. So the industry is in trouble because of this issue,” she said.

South Korea’s largest conglomerate Samsung Group had in August said it would invest 240 trillion won ($ 206 billion) in the next three years to expand its footprint in biopharmaceuticals, artificial intelligence, semiconductors and robotics.

The company also addressed the significance of the chip industry in the South Korean economy.

“The chip industry is the safety plate of the Korean economy…Our aggressive investment is a survival strategy in a sense that once we lose our competitiveness, it is almost impossible to make a comeback,” Samsung Electronics said in a statement.

Many tech companies have begun developing their own chips, a move that will not only alleviate the current supply concerns but will likely help the industry in the long-run.

Apple is using its own M1 chip in its new iPads and Macs. A report by Nikkei Asia suggests that Google is developing its own central processors that will be used in CPUs of its Chromebook laptop from 2023.