The Big Chip Crisis and Why it Hits Everybody

A global shortage of semiconductors is hurting businesses all over the world. The deficit drives up consumer prices and it is far from over.

• Car companies, producers of consumer electronics and many others are suffering from a lack of semiconductors. Production in the industrial world is hampered and goods are missing in the stores.
• The shortage originates from a combination of rising demand and broken supply chains. Having neglected the problem for years global companies were fully hit by the pandemic’s economic fallout.
• The chip crisis has already reached the political level. By driving up prices and limiting production recovery plans for the time after Covid-19 are being thwarted.
• The debate about how to organize future supply chains is in full swing. Semiconductor production is being brought back to Europe and new manufacturers are stepping in.
• In this reading we examine one of the main economic problems of the upcoming months and years: the shortage of a basic industrial component and its effect on global customers.