CHIP SHORTAGE HAMPERS GLOBAL MANUFACTURING

A worsening worldwide shortage of computer chips is hampering the production of everything from cars to PlayStations, according to major manufacturers.

Samsung blames a “serious imbalance” in semiconductors globally for an uncertain outlook for its phone production and may delay by a year its introduction of a new Note phone. 

Volkswagen says the chip shortage has crimped its output by 100,000 cars; Honda has curtailed production at its North American plants this week because it has too few chips.

Globally, the auto industry could lose $61 billion in sales this year because of the chip shortage, data firm AlixPartners estimates. 

The shortage is due to the sudden surge in worldwide demand for electronics last spring when the global economy shut down, analysts say.

The shortage has been worsened by Apple and China, which are hoarding chips, Bloomberg reported.

Chipmakers say they are working as fast as possible to speed production to resupply the industry this year.

The shortage “will frustrate the supply chain in the next six months,” Charles Shum, an analyst with Bloomberg Intelligence, told the news service.

TRENDPOST: With new lockdowns underway, it will take longer to expand production for some kinds of specialized chips. We note this article and these circumstances since it will not only choke off the supply for consumer products industries, it will also spike prices... thus pushing up overall inflation rates higher.

3 Comments
  1. John Kennedy 7 months ago

    And the Japanese ship that is now blocking the canal is adding to the problem. It could be stuck there for weeks. Already 150 ships are backed up and many will be carrying chips.

  2. lvblasiotti 7 months ago

    What Is Inflation?

    Inflation is the decline of purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some period of time. The rise in the general level of prices, often expressed a a percentage means that a unit of currency effectively buys less than it did in prior periods.

    Inflation can be contrasted with deflation, which occurs when the purchasing power of money increases and prices decline.
    Key Takeaways

    Inflation is the rate at which the the value of a currency is falling and consequently the general level of prices for goods and services is rising.
    Inflation is sometimes classified into three types: Demand-Pull inflation, Cost-Push inflation, and Built-In inflation.
    Most commonly used inflation indexes are the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).
    Inflation can be viewed positively or negatively depending on the individual viewpoint and rate of change.
    Those with tangible assets, like property or stocked commodities, may like to see some inflation as that raises the value of their assets.
    People holding cash may not like inflation, as it erodes the value of their cash holdings.
    Ideally, an optimum level of inflation is required to promote spending to a certain extent instead of saving, thereby nurturing economic growth.

    https://www.investopedia.com/terms/i/inflation.asp

  3. […] Fed view also downplays long-term shortages of basic goods such as metals and computer chips (“Chip Shortage Hampers Global Manufacturing,” 23 March, 2021 and “Commodity Supercycle Underway?”11 May, […]

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