Chip shortage spirals beyond cars to phones, consoles

TheStar Mon, Feb 08, 2021 10:10am - 3 years View Original


Auto and electronics makers that cut back drastically in the early days of the outbreak are now rushing to re-up orders, only to get turned away because chipmakers are stretched to the max supplying smartphone giants like Apple Inc.

TAIPEI: The first hints of trouble emerged in the spring of 2020. The world was in the early throes of a mysterious pandemic, which first obliterated demand then super-charged internet and mobile computing when economies regained their footing.

That about-face - in a span of months - laid the seeds for potentially the most serious shortage in years of the semiconductors that lie at the heart of everything from smartphones to cars and TVs.

Auto and electronics makers that cut back drastically in the early days of the outbreak are now rushing to re-up orders, only to get turned away because chipmakers are stretched to the max supplying smartphone giants like Apple Inc.

This week, Qualcomm Inc’s Cristiano Amon, head of the world’s largest mobile chipmaker, flagged shortages “across the board, ” citing the industry’s reliance on just a handful of players in Asia.

Amon joined a growing chorus of industry leaders warning in recent weeks they can’t get enough chips to make their products. Carmakers appear in direst straits and have spurred the US and German governments to come to their aid - General Motors Co this week was forced to mothball three North American plants and Ford Motor Co is bracing for a 20% drop in near-term output. But more industries have lately copped to shortages, emphasising how Covid-19 and a boom in a new breed of 5G-ready smartphones like the iPhone 12 is exacerbating a shortage of capacity plaguing the entire consumer industry. Chip shortages are expected to wipe out US$61bil of sales for automakers alone, but the hit to the much larger electronics industry - while tough to quantify at this early stage - could be far larger.

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