The looming danger of a massive chip glut
Excessive production of anything is a recipe for trouble and there is a danger that it’s going to happen with one of the most valuable components that power countless everyday devices: semiconductors. Multiple governments are driving this, through hundreds of billions of dollars of production subsidies, all coming on stream at the same time.
- by autobot
- Sept. 16, 2024
- Source article
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Excessive production of anything is a recipe for trouble and there is a danger that it’s going to happen with one of the most valuable components that power countless everyday devices: semiconductors. Multiple governments are driving this, through hundreds of billions of dollars of production subsidies, all coming on stream at the same time. The backstory is this: During the Covid-19 pandemic, people binged on computers, smartphones, home networking equipment and smart TVs, which sent the demand for the chips that power such devices soaring. In 2021, severe shortages emerged in the semiconductor market, which forced many manufacturers of cars and home appliances to shelve their production plans. The acute dependence for semiconductors on a handful of producers in Taiwan, South Korea and China set off alarm bells in many capitals.