Pandemic Disruptions: The COVID-19 pandemic disrupted global supply chains, leading to factory closures and delays in chip production. This setback had a ripple effect on multiple industries.
Increased Demand: The rise of remote work, online education, and the Internet of Things (IoT) led to an increased demand for electronic devices, exacerbating the shortage.
Geopolitical Factors: Trade tensions and export restrictions between major chip-producing countries, such as the U.S. and China, further strained the supply chain.
Complex Manufacturing: The semiconductor manufacturing process is highly complex and requires specialized equipment. Shortages of these tools and materials contributed to the problem.
Long Lead Times: Building new chip fabrication facilities is a time-consuming process, and the lead times for increasing chip production capacity can be several years.
Efforts are underway to address the chip shortage, including investments in domestic chip manufacturing and collaborations between governments and industry players. However, it may take some time before the supply chain stabilizes and the shortage is fully resolved.