Semiconductor Industry Update: Mid Year Review
Monday June 28, 2021
The semiconductor industry: An ever-expanding market, essential to our everyday life. But what trends have we seen in 2021, especially in the shadow of the Covid-19 pandemic?
Covid-19 put enormous pressure on all supply chains, with closures of manufacturing plants leading to shortages across numerous sectors. The technology sector especially suffered, with laptops, tablets, smartphones, and other high tech device demand skyrocketing as people were furloughed or working from home. This high demand coupled with the shortages across supply chains cumulated in a shortage of chips for industries from automotive to servers (SCMP).
The automotive industry has been on the receiving end of chip shortages. Car production showed signs of slowing down at the beginning of 2020, causing automotive producers to curtail their orders of chips. Semicon providers used this extra inventory to supply the high-demand tech markets. When car sales began increasing again, semicon suppliers did not have the stock to supply the car manufacturers, leading to the current supply crunch the market is experiencing (SCMP).
Analysist are predicting that this shortage will lead to an acceleration in the next semicon investment cycle. In the short term, however, the impacted industries will continue to see tight supply across the board.
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