The entire world has suffered from the issues arising as a result of the shortage of semiconductors. Interestingly, despite the chips not being supplied in sufficient quantities, chip makers’ stock value has touched the sky.
According to a report published in MarketWatch, market analysts are of the opinion that companies will continue to face a deficit in the supply of chips till this year comes to an end. The world has gone digital in a big way what with the Covid-19 crisis restricting movement and forcing much of the world population to work or take online classes from home.
The number of people using computer devices has increased substantially because of this and a few other reasons. There has been a steep increase in demand for chips which the market is struggling to keep up with. Some industries, in specific, have suffered far more than the others. The automobile industry has suffered greatly because of the shortage of chips and had to bring down a reduction in its production processes.
Maribel Lopez, who works as the principal analyst at Lopez Research, has categorically stated that the semiconductor industry is going through a major crisis and that the demand is exponentially higher as compared to the supply. Further commenting on the issue, Lopez said that until a big economic meltdown happens, most devices you will lay your hands on will have a chip in them.
The demand for chipsets that were to be used in smartphones was supposed to see a surge last year but there nobody was expecting an increase in demand for chips that were made for PCs. In the last couple of years, the semiconductor industry has been making efforts towards integrating chips in places or devices they were not earlier incorporated in. This is one of the major reasons why the process of manufacturing the chips became more complicated with time. The Covid-19 crisis turned things around in a major way and affected the supply chains adversely.
Another market analyst said that despite the warning signs, companies have not really come to put together a plan which would help them deal with this crisis. He further stated that there is a lot of optimism in the market what with many believing that the situation would improve in the next couple of months but concrete steps must be taken for that.