Why is There a Global Chip Shortage?

What began with temporary manufacturing disruptions at the onset of the COVID-19 pandemic has led to a series of supply breakdowns, including those related to computer chip shortages, across multiple industries.

Also called an integrated circuit, IC, or computer chip, a modern chip is a network of electronic circuits printed on and embedded in a flat piece of silicon. Silicon is a semiconductor, meaning it can carry an electrical current between highly conductive elements like metals and less conductive materials like ceramics.

Demand for products with chips has risen since the start of the pandemic, and chip manufacturers have been struggling to meet this demand. (A single company, TSMC, makes roughly a quarter of the world's chips. And manufacturers from two Asian countries, South Korea and Taiwan, make the majority of them.) As a result, customers that can't get the products they want either have to wait—or pay more.

PRODUCTION CREDITS:

Produced by: Alex Clark
Production Assistance: Christina Monnen

Music: APM

© WGBH Educational Foundation 2021

[reidcushman]

'Just-in-time" supply works great until there's a disruption of any part of the chain, and then it doesn't look so smart.

[pcb]

I worked in semiconductors for 6 years.. the hundreds of different strange materials and chemicals required boggles the mind. Stuff that will kill you with one drop.

[TimeTheory]

I'd be happy to use my ten year old computer, but I can no longer find circuit board replacement parts. That's why you've got to buy a new computer even when it's an easy fix.

[fadilsastrodipoero]

god shout out to that mom waiting in line she deserves all the love in the world

[kevinmorris]

It's fairly simple. If almost all of them come from the same few places, then you have a shut down, there's a shortage. The answer is making them in more places. The trouble is people buy what's cheaper, not necessarily what they should.

[Xenovicious]

I love the mom thats waiting for a GPU so her kid can play Fortnite. Kid doesn't need a 3070+ to play it but okay.

Also interesting seeing how backlogged the supply chain is for servers in the data center. Certain models of Juniper switches are pushing 9 months out wait at this point.

[summerWTFE]

I still don’t understand why we have a chip shortage. Because demand doubled? Why do other industries have shortages? It’s not explained.

[Javas_Dream]

There’s something very odd about this almost 3 year chip shortage. One issue, the U.S. needs to stop making everything computerized so our every move can be tracked, and our private/personal data can be bought and sold for others to get rich off of.. It’s our watches, our phones, our computers, our auto’s. Our privacy in going down the toilet. Does everything need to be Global …. Not really.

[bahlol]

Chips shortages drives up profits. That is the only reason we have a shortage.

[jaytubin]

I work at a Chevrolet dealership and I’ve been told the 2023 cars are going to come with a standard key instead of a remote fob and push start

[IceManLikeGervin]

Because many chips are obsolete such as in the auto industry. The auto industry needs to make their own chips instead of purchasing through a third party or update their vehicles for the newer chips that are being manufactured.

[Liz-hg]

How can we navigate the upcoming chip shortage, and what insights and strategies should we consider?

[TreeHairedGingerAle]

Because we're not landfill mining, for some strange reason :3

[desertdragon]

Another great video from Nova. Thanks!

[azurelad]

Because "shortage" drives up prices.

[giovannirojo]

I work at a dealership and some lady was telling me, thats something dealerships do to get more money because cars are being up charged, i kinda just laugh at how people don’t understand economics. I get it ppl dont watch the news but then act like they know

[dahogster]

That hurt when the mom said she was trying to buy a gpu for her song to play fortnite

[TheMrfoxguy]

They are making the shortage on purpose to drive up prices

[MrHeSeYe]

I wish the narrator checked the correct pronunciation of *silicon* before recording.

[alvinoflys]

Couldn't an argument be made to buy all of this stuff now? Seeing as how the "shortage" continues on and on and now apparently will be going into 2023 isn't the consumer better off buying everything now rather than wait for the POTENTIAL event that prices go down? Because ultimately; why would prices go down after the "shortage" ends? Companies are making ridiculous amounts of money off of the "scarcity" of the items. Why would they shift their profit margins to fit the consumers needs when generally we are seeing people pay for it? PS5's were announced at $700 and retailers are listing them for as high as $1, 300. The chip company made more money off the purchase of that chip by Sony and Sony in turn will make more money on the sale because of the shortage. Once the "shortage" ends won't these companies actually be incentivized NOT TO reduce costs for the consumer seeing as people are buying them anyway? Sony is approaching 20 million units sold and is ENTIRELY during the additional BILLIONS of dollars versus pre-pandemic release