Semiconductor Shortage Growing; Huawei Fight Triggered, but Did Not Cause It
Feb. 15 , 2021 (EIRNS)—A worldwide shortage of high-quality semiconductor chips is now affecting a number of industries besides auto—which is hard hit—and causing corporate losses estimated to climb to $60 billion or more in 2021. The shortage is not primarily the result of blockades on Silicon Valley chip makers exporting to Huawei, although Huawei’s hoarding of chips to protect itself was one factor—many other companies were hoarding at the same time, according to a Feb. 7 Bloomberg News review of the situation.
“Chinese” companies hoarding chips drove the Chinese economy’s chip imports to $380 billion in 2020, one-fifth of all its imports. But this hoarding included prominently Apple, Tesla, Qualcomm, Nintendo, Sony and Microsoft, and many others not headquartered in China. This hoarding followed the first few months of the pandemic when chip demand had collapsed, and production correspondingly had been cut. Simultaneously orders for all kinds of electronic devices rose sharply as a result of pandemic “lock-downs” and shut-ins. Corporate losses will now be largest in China, if the “expert” analysts are correct. The auto companies are now in trouble for not hoarding.
Central to this global industrial bottleneck are a Taiwanese and a Korean company, according to Bloomberg—Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics. Industries worldwide are most dependent on their production.
The article reports that officials from the Biden Administration, Qualcomm, the Semiconductor Industry Association (Silicon Valley chipmakers), and Corning met Feb. 5 with Taiwan’s Minister of Economic Affairs and TSMC officials to discuss the crisis.
GM, Ford and Nissan have cut production; Nissan has suspended truck production in Mississippi, Ford at its Chicago Assembly Plant; GM at three plants in the United States. Aviation may be next hit.