As of now, with the world still revelling from a global pandemic, one field severely struggling to meet consumer demand is the semiconductor & chip manufacturing industry. However, what was the root cause of this issue, & how has it managed to continually affect the automotive, technological & other industries though it has been over a year since the problem first began.

Undeniably the most prominent issue has been the pandemic, which forced all to stay home & temporarily halted manufacturing & production lines. This created to a sharp increase in demand for computer parts such as CPU’s & GPU’s being needed since more were working from home & this led to the greatest increase in PC part sales in 10 years.

Halting manufacturing also triggered another problem which was that companies now had to secure manufacturing slots in advance & far earlier than usual. This affected the computer hardware industry & the automotive industry as both severely underestimated sales. The automotive industry thought that they wouldn’t be prevalent during a pandemic however as countries eased lockdowns & opened up, less wanted to use public transport & it led to an increase in demand for new cars. This undeniably led to companies like JLR (Jaguar Land Rover) having to halt production as they couldn’t secure any more chips for car infotainment screens & ECU’s because manufacturers like TSMC & Samsung only gave the amount specified & were unable to provide more.

Another issue was new product launches & underestimation of sales. In September 2020 Nvidia & AMD launched a new line of high-performance Graphics cards which were a significant upgrade over prior generations. This caused many technology hobbyists as well as influx of people working from home that wanted to purchase & upgrade. This put the already reduced supply of parts in extremely high demand. In addition to this some people took advantage of this limited supply of stock by using specially designed ‘scalping’ programs to purchase a vast amount of stock at retail price then use sites such as eBay to heavily mark them up & charge extortionately when parts at retail stores at retail prices were out of stock.


A culmination of the above-mentioned issues has led to the Semiconductor & chip shortage today. But the issue has been attempted to be aided & solved. Recently after being elected into office president Biden has provided $37million to attempt to solve the issue; though this did help as can be seen by companies like TSMC making a new factory to manufacture chips. The problem is still far from over & at present, prices for current & older generation personal computer parts are highly inflated & part of the automotive industry has ground to a halt & unfortunately with the world still battling with a pandemic this seems unlikely to change in the near future.