The Microchip Shortage Won’t Be With Us Forever

The microchip shortage is global, and governments across the world are rethinking their plans.

Falan Yinug, director of industry statistics and economic policy for the Semiconductor Industry Association, tells KTRH News the U.S. only manufactures about 12% of the world’s microchips, down from 37% in 1990.If current trends continue, it will be down to 10% by the end of the decade. Some countries are offering manufacturers incentives to build more factories, but the US is not among them.

The pandemic led to an increased need in products relying on semiconductors as workers went remote from home, students went virtual at school, Hollywood went on a streaming binge, and nobody was driving, which was tremendously disruptive to a supply chain for a product that takes a long time to make. “On average it can take up to 26 weeks to make a semiconductor. This is one of the most advanced products to make in the world, literally,” Yinug says. For comparison, Toyota says they can build a car in 17-18 hours all in. It takes an hour to make a computer. Apple can manufacture 350 iPhones per minute at their Zhengzhou plant. 26 weeks to make a semiconductor is about 6 and a half months, which is roughly how long it takes to construct a home in suburbia. Even mass produced, it’s not fast.

But supply is chasing demand, and is expected to catch up as the world ramps up production capacity. “Most analysts believe it will resolve in a matter of months instead of a matter of years,” says Yinug. That still might not entirely save the consumer electronic needs of Christmas shoppers this fall, but by next year empty auto dealer lots and the dearth of smartphones may just be a part of the folklore that goes with remembering “back during the pandemic.”

photo: Getty Images

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