This story was originally published here.
The semiconductor shortage that is currently facing global manufacturers will produce winners and losers. There are multiple sectors being hit, particularly the tech and automotive industries.
The shortage wasn’t caused by any single factor. Rather, multiple factors conspired in creating a serious shortage. But the pandemic was the overarching cause. Tech and automotive sectors have been especially hard hit, but why?
Tech has been hard hit because trends like work from home and school from home have increased the demand for electronics. Yet there simply isn’t enough supply.
Current business models regarding design and fabrication play a huge role too. More and more semiconductor companies are fabless, meaning they design chips and outsource the manufacturing to other companies. That has created a bottleneck.
On the automotive side, manufacturers were hit with production line shutdowns due to the pandemic. Some had to deny chip shipments and are now finding they can’t easily resume shipments.
Trump’s trade war on China also plays a role in the global shortage. Many fabless companies had to switch over from Chinese fabricators. The results are far-reaching and there are semiconductor companies poised to benefit from the situation… Story continues here.
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Sincerely,
Jeff Brown
Founder, Brownstone Research
