Timeline: causes of the global semiconductor shortage

The chip shortage is a global supply chain crisis that continues to affect 169 industries, & has seen a perfect storm of causes, including war & pandemic

The semiconductor industry is cyclical at the best of time; gluts and shortages are not uncommon. But the pandemic magnified the problem, as workers stuck at home rushed to buy kit. Data-centre demand also spiked, as people turned to video-calling, video-streaming and video gaming. Other events have also compounded the problem, and here we look at them, on a timeline. 

Early 2020 - The pandemic

The COVID-19 pandemic caused massive disruptions in supply chains and logistics. This was coupled with a 13% increase in global demand for PCs as people worked from home. Chips were suddenly unavailable for the manufacture of a broad range of products, including vehicles,

Late 2020: Trade war between US and China

As part of the economic conflict between China and the United States, the US Department of Commerce imposed restrictions on China's largest chip manufacturer, Semiconductor Manufacturing International Corporation (SMIC), which made it harder for them to sell to companies with American ties.

2021: Cryptocurrency sees chip demand soar 

The increased use of cryptocurrencies requires a huge amount of data mining, all done with specialised computers. The high demand for cryptocurrency mining machines reduced the availability of chips for other uses. The collapse of cryptocurrencies since then has eased the problem.

Summer 2021: Severe weather in Taiwan

Taiwan is the leading producer of chips, and severe droughts in the summer of 2021 affected output. The droughts affected production due to the lack of available ultra-pure water that is needed to clean the silicon wafers used in microprocessors.

April 2022: Russia invades Ukraine

Neon is critical for the lasers used to make chips, and Ukraine's two leading suppliers of neon produce about half the world's supply . Both halted operations when Russia invaded, causing further disruptions to supplies of chips.


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