Global Chip Shortage Market Research for Business Outlook

by Global Market Research Analyst

Global Chip Shortage is a pandemic induced disruption that affected the supply of chips and integrated circuits globally. It was primarily caused by the pandemic which resulted in a huge number of people transitioning to the digital economy in the workforce sector and school and college-going students transitioning to virtual classes concerning the knowledge economy.

According to Market Reports from Semiconductor Industry Association, sales for semiconductors and integrated circuits for the month of May 2021, was 26% higher than what was observed for the same period in 2020.

What is being done to solve the global chip shortage crisis?

Analysts and market researchers have suggested that demand for semiconductors are to see an upswing in the near term. This is a direct result of more industries undergoing digital transformation. Manufacturers and governments are actively pursuing to add more capacity to their manufacturing facilities and supply chains.

Other miscellaneous factors that contributed to the ongoing global chip shortage crisis is the fact that the global chip market is mainly an oligopolistic market with a few sellers owning a lion's share of the market. The lack of diversification in the market resulted in constrained capacity expansion and the opening up of new manufacturing facilities was limited. Similarly, Taiwan is a manufacturing powerhouse of chips; however, Taiwan was adversely affected by a drought that disrupted its capacity to produce chips.

The global chip shortage crisis is expected to end by late 2022 or early 2023.

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