comment on this article

Global chip shortages point to a ‘serious imbalance’

The global chip shortage appears to be getting worse, before there are any signs of it getting better, as Samsung has now warned that it's causing disruption in sectors other than automotive, and has warned that it might have to postpone the launch of the next Galaxy Note smartphone.

The company has been talking to its investors about ‘serious imbalances’ in the supply chain and this announcement has heightened fears that these market shortages could slow the global economic recovery.

While governments around the world are working to increase production Samsung's co-chief executive and mobile chief, Koh Dong-jin, speaking at a shareholder meeting, warned that, "It is hard to say the shortage issue has been solved 100%."

These shortages are being driven not only by the pandemic, which caused production schedules to be altered and deliveries cancelled, but recently by the severe weather seen in Texas which has impacted production - the shutdown of Samsung’s own Texas facility could reduce global smartphone production by 5% in the second quarter of this year.

The car industry has tended to dominate the headlines and has suffered severe shortages as car manufacturers initially cut their chip orders significantly, only to be wrong footed by a strong recovery in the Far East. In response, chip manufacturers shifted production to consumer goods as demand soared – driven by consumers buying new devices as they found themselves in lockdown.

All of which has tended to obscure the growing problems that are now facing other sectors, whether that’s a scarcity of graphics cards. the postponement of new model releases or shortages of popular products, such as gaming consoles.

While consumers might not be too troubled it's likely that we will see more delays when it comes to new product releases, such as Samsung's suggestion that the new Galaxy Note smartphone may now not appear until next year.

While semiconductor manufacturers are investing in new production, shortages can be expected to continue for some months.

These shortages have simply and clearly demonstrated the importance of semiconductors to so many sectors of the economy, and in turn have highlighted real weaknesses in the supply chain which is dominated by so few countries.

Neil Tyler

Comment on this article

This material is protected by MA Business copyright See Terms and Conditions. One-off usage is permitted but bulk copying is not. For multiple copies contact the sales team.

What you think about this article:

Add your comments


Your comments/feedback may be edited prior to publishing. Not all entries will be published.
Please view our Terms and Conditions before leaving a comment.

Related Articles

Worrying times

News that UK companies might be shut out of the Galileo programme raises ...

Software and security

Last month Embedded World once again demonstrated why it’s described as the ...

Close to the edge

“We are entering a new era where artificial intelligence systems are helping to ...

Back to the future

More governments around the world are now looking at the possibility of ...

Getting real with VR

Professor Robert Stone has been involved in the world of virtual, augmented and ...