Chip Shortages Creating Problems for Many Industries

While chip shortages for high-end systems are not unusual, it is uncommon that a wide variety of industries feel the effects of shortages, especially in the logistics and industrial industries.

 

Miami, FL -- (SBWIRE) -- 04/22/2021 -- In February, President Biden ordered a 100-day review of the semiconductor supply chain. This process draws on chief executives from 19 large companies to discuss the issue. Congress has also backed legislation to ramp up domestic chip manufacturing.

Semiconductor shortages, which have been spurred on by the COVID-19 pandemic - causing production issues at large chip factories - have been the source of many concerns in recent news. Questions about chip shortages echo in both business and among policymakers as they analyze multi-industries' dependence on small components.

Chip supply shortages are not a new occurrence, though past issues have been with only a particular type of chip or as they affect certain industries. Electronic chips can sometimes be more difficult to find if made in older factories, which are difficult to modernize, making the problem even more dire.

The focus has been on the temporary closing of major United States car plants, but the main issue is that the shortages affect industries that have not seen such an issue in recent years. Previously, machines and technology were not so dependent on computer programming and the internet to effectively run and produce, but with the boom of internet dependence as an effect of the pandemic, more and more companies have built a solid reliance on intelligent technology.

The problem in the logistics and industrial industries is that there is a lack of supply for semiconductors - manufacturers turn products into chips through complex processes through the use of chemicals, gases, and other machines. Many machines, while predominantly operating without smart technology, have computer programming to help them run effectively on the backend. When companies deal with smart technology meters and the like, they could potentially feel even more effects of the shortage.

At this time, chip delivery schedules are stretched to 12 or more weeks within a year. Large manufactures are doubling capital spending to meet demands.

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