{"id":15398,"date":"2021-05-26T00:00:00","date_gmt":"2021-05-26T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/26-05-2021\/semiconductor-chips-shortage-in-manufacturing-sector\/"},"modified":"2025-07-12T15:39:18","modified_gmt":"2025-07-12T10:09:18","slug":"semiconductor-chips-shortage-in-manufacturing-sector","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/26-05-2021\/semiconductor-chips-shortage-in-manufacturing-sector","title":{"rendered":"Semiconductor Chips Shortage in Manufacturing Sector"},"content":{"rendered":"<p><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong><u>In News<\/u><\/strong><\/span><\/span><\/span><\/p>\n<p><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">Recently, <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>India-based car manufactures and premium<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> bike makers started <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>\u00a0curtailing\u00a0 production across various categories due to <\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">shortage of inputs, especially semiconductor chips.<\/span><\/span><\/span><\/p>\n<div>\n<table style=\"border-collapse: collapse; border: none; table-layout: fixed; width: 624px;\" cellspacing=\"0\">\n<tbody>\n<tr>\n<td style=\"background-color: #fff2cc; vertical-align: top; border: 1px solid #000000;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong><u>Semiconductors\u00a0<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">A semiconductor is a material product usually composed of <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>silicon, which conducts electricity more than an insulator,<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> such as glass, but less than a pure conductor, such as copper or aluminium. Their<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong> conductivity and other properties<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> can be altered with the <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>introduction of impurities,<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> called <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>doping<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">, to meet the specific needs of the electronic component in which it resides.\u00a0<\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">Also known as <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>semis, or chips, semiconductors<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> can be found in thousands of products such as computers, smartphones, appliances, gaming hardware, and medical equipment.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">These devices find widespread use in almost all industries especially in the automobile industry<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>Semiconductor chip<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">: A semiconductor chip is an<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong> electric circuit with many components <\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">such as transistors and wiring formed on a semiconductor wafer. An electronic device comprising numerous of these components is called an<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong> \u201cintegrated circuit (IC)\u201d.\u00a0<\/strong><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">Electronic parts and components today account for 40% of the cost of a new internal combustion engine car, up from less than 20% two decades ago. Chips account for a bulk of this increase.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0I<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #1155cc;\"><u>mage Courtesy : Toppr<\/u><\/span><\/span><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong><u>Reasons for shortage<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>Beginning of the Covid-19 pandemic<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">The trigger point was the beginning of the <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>Covid-19 pandemi<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">c and the subsequent lockdowns across the world that forced shut <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>crucial chip-making facilities<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> in countries including<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong> Japan, South Korea, China and the US<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">\u00a0A key feature in a chip shortage is that it causes <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>cascading effects<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">, given that the<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong> first one creates pent-up<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> demand that becomes the cause for<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong> the follow-up famine.<\/strong><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>High Demand\u00a0<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">With the onset of the coronavirus pandemic, higher demand for mobile phones, <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>laptops, gaming consoles, electronic products and the usage of the internet h<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">as increased the requirement for semiconductor chips.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong><u>Impacts\u00a0<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">Consumers of semiconductor chips, which are <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>mainly car manufacturers and consumer <\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">electronics manufactures,<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong> have not been receiving enough<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> of this crucial input to continue production.\u00a0<\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>Chip shortage<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> is measured in <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>chip lead time<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">, which is the<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong> gap between<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> when a c<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>hip is ordered <\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">and when it is delivered.<\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: square;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">\u00a0The chip lead time increased to 17 weeks in April, from around 12 weeks at the beginning of 2020. .\u00a0<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>Delays in the launch<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">\u00a0<\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">Mahindra &amp; Mahindra is factoring in some delays in the launch of its <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>flagship Mahindra XUV500 <\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">and its new Scorpio, with the company flagging concerns over seamless availability of <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>raw materials, especially semiconductors<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">.\u00a0<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>Discarding features and high-end electronic capabilities<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">Some companies have reportedly <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>started discarding features and high-end electronic capabilities<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> on a temporary basis to deal with the chip shortage.\u00a0<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>Japanese carmaker Nissan<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> is said to be leaving <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>navigation systems out of thousand<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">s of vehicles, while F<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>rench company Renault<\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> has stopped offering a larger digital screen behind the steering wheel on its Arkana SUV.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">\u00a0Amsterdam-headquartered Stellantis has modified its Ram 1500 pickup vehicle so that the digital rear-view mirror that usually comes standard is now available only as an upgrade option.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>Cost\u00a0<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">The global semiconductor chip shortage will cost a<\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong>utomakers $110 billion in lost revenues this year, up from a prior estimate of $61 billion.<\/strong><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"><strong><u>Conclusion &amp; Way Forward\u00a0<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">The present shortage of inputs, especially semiconductor chips in the automobile industry seems to be a temporary phase. Various initiatives of the government like <\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #1155cc;\"><strong><u>Production Linked Incentive scheme<\/u><\/strong><\/span><\/span><\/span><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\"> will provide a much needed trigger.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #000000;\">The Prime Minister\u2019s call for an \u2018Atmanirbhar Bharat\u2019, have rejuvenated hopes of a rise of the indigenous electronics industry, gradually allowing India to be truly self-sufficient.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><a style=\"text-decoration: none;\" href=\"https:\/\/indianexpress.com\/article\/explained\/explained-the-semiconductor-chips-shortage-and-how-carmakers-are-coping-7327321\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-size: 11pt;\"><span style=\"font-family: Arial;\"><span style=\"color: #1155cc;\"><u>Source :IE<\/u><\/span><\/span><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News Recently, India-based car manufactures and premium bike makers started \u00a0curtailing\u00a0 production across various categories due to shortage of inputs, especially semiconductor chips. Semiconductors\u00a0 A semiconductor is a material product usually composed of silicon, which conducts electricity more than an insulator, such as glass, but less than a pure conductor, such as copper or [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":15399,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[26,33],"class_list":["post-15398","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","tag-gs-3","tag-science-technology"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/5733244current-affairs.jpg","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/15398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=15398"}],"version-history":[{"count":0,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/15398\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/15399"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=15398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=15398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=15398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}