Global Chip Shortage

Global Chip Shortage

Nowadays everyone is facing an issue of a sudden increase in the price of mobile devices, laptops, cars, bikes & other electronic gadgets. But we are still buying it by thinking that it may be a change in the feature of these gadgets or we are thinking that demand is more so, to earn profit manufacturers can increase a price.

Have you ever thought that maybe these things are tangled with one material only?

Have you heard about Global Chip Shortage?

Yes. Global Chip shortage. These are the chips used in all electronic devices or cars for various purposes. When these chips are used in cars, they are used for suspension, power windows, power steering, Music system, temperature etc. & regarding electronic devices or gadgets there are many functions & features which are based on these chips.

What are the Chips?

These chips are nothing but Semiconductors which you can categorize as diodes,
resistors, capacitors, transistors & ICs or a full circuit mode.

Why is there a Global Chip Shortage?

There are many factors that are responsible for this Global Chip Shortage. They are
as follows -

Lockdown effect - Yes, due to COVID-19 not only human beings but also non-living things also get affected. There are many countries that are still facing an economic crisis.

Due to this reason demand for luxurious things decreases as compared to the essential ones. While thinking of luxurious things, cars are one of the luxuries for common people. Because of the lockdown situation, many car manufacturing companies have stopped their production by thinking there will be a decrease in the number of consumers as they are economically affected. So, they stopped buying Chips from the market & this situation affects production Chips in Manufacturing companies.

Sudden Increment in Demand for Electronic Gadgets

As Fabricant companies stop their production, suddenly many countries have opened their lockdowns. In the lockdown period there 2 cultures that have risen are Work from Home & Education from home. After the lockdown period,everyone is looking to buy laptops, smartphones, routers, etc to complete their gadgets needs. So, suddenly the demand for chips increased in a very short time.


Yes. 5G is also a cause of this Global Chip Shortage. As smartphone companies want to give 5G experience in their mobile phone, they have used extra chips, which are still not in use as there is no sign of 5G yet in many countries. So, currently, they are useless.

Many Countries are Against China

The main production of chips belongs to China, Taiwan & Hong Kong. Due to the COVID-19 situation everyone is against china, no one wants to buy products made in China & America also has started a trade war with China, so American companies are not able to buy these chips.

Who got affected by this Global Chip Shortage?

Automobile Industry

As there are no chips or fewer chips available in the market they are not able to finish their production. They have more millions of cars that are at the finish line but not able to get in the market due to chip shortage.


The launching of Sony’s PS5 got delayed due to Global Chip Shortage. PS5 is an electronic gadget for playing video games. As it is an electronic device it also uses many semiconductors for functionality. As there is a shortage it also got affected.

All Mobile Phone Manufacturers

As we know that all mobile phones' functionality depends on the chips or circuits they are using. Due to this crisis, they have been affected badly. Because there is demand for mobile phones in the market but they are able to complete it.

Common people

We also got affected by this crisis but indirectly, we are buying all electronic gadgets, cars at a higher cost.

Who got the Profit in this Situation?

When applying the Supply-demand rule only an industry that provides equipment to fabrication plants are in the profit due to this situation.

This is all about the causes, effects of the Global Chip shortage. Everyone who got affected is eagerly waiting for the end of this situation but It may take a few years or decades to improve the situation.

Till then we have to keep hope & expect the best can happen with this situation.

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