The "Semiconductor" shortage crisis from start to finish - Economist

Therefore, semiconductors are widely used in the electronic device industry, including integrated circuits and transistors, as well as in the automotive and smartphone industries, and they are like chips that allow electronic devices to capture, process, and store data.

You can imagine how small these chips are, as the most advanced semiconductor components range in size from 5 to 7 nanometers. "

There are few countries that invest in the manufacture of "semiconductor" chips, as entry into this field requires a lot of investment, and therefore some countries have specialized either in manufacturing or research and development, and we find that the main producers of semiconductors are:

And the rest of the world does not have only a few small factories that do not affect the industry, and in the same context, we find that the entire continent of Europe has focused on research and has little production capabilities.

We find that the sectors most affected by the severity of the semiconductor shortage crisis are:

In the same context, analysts said, "Moody's credit rating agency" that this crisis in the lack of chips will affect the production of cars globally and the volume of production will decline by about 2% during the year 2021.

The first reason is the sudden and large increase in the demand for electronic chips as a result of the processing of electronic products with the high demand for computers and electronic game players in light of the spread of the Covid-19 epidemic and the accompanying remote work and home quarantine to this day in many countries.

In addition to the above, we find that the semiconductor market was mainly under pressure due to the trade war between the United States and China, and major companies such as Huawei have moved in 2020 to stockpile large quantities to reduce the impact of sanctions.

Since the start of the crisis, many prices of semiconductor commodities have increased, which led to a global uproar that led many companies working in the chip industry to announce large investments to bridge the gap between supply and demand.

We find that Intel intends to invest about 20 billion dollars, while TCMC is investing 100 billion dollars.

But many analysts warned that the crisis will not be resolved in a day or a month, as the establishment of a new semiconductor production plant takes two to four years, and the new production capacities will not reach the market before 2023-2024.

But the excess demand is expected to subside within six to nine months, because life is expected to return to before Corona and the idea of ​​home isolation will disappear, leading to the return of activities to normal.