Chip shortage: a problem and an opportunity

We live in a hyperconnected world in which more and more objects are equipped with the necessary technology to interact with their environment in the so-called internet of things. The miniaturization of electronic systems makes it possible to place chips in a multitude of spaces, adding a layer of digitization.

These are essential components in consumer electronics such as computers, cell phones, tablets and video game consoles. They are also found in many other devices and applications such as household appliances, industrial machinery, automobiles, aircraft, satellites, communications, biomedical implants and a long etcetera. Today there are chips in places unimaginable a few years ago, such as in doors, windows, sockets and lighting.

A limited supply for a growing demand

The growing demand for chips is causing serious supply problems in various sectors of industry. For example, an increasing number of automotive manufacturing plants have had to halt production due to a shortage of semiconductors – which account for a growing percentage of a car’s component list.

Another example is GPU (Graphics Processing Unit) chips, which have traditionally been used in computer graphics cards. These are increasingly being used in computing, given their greater efficiency for the simulation of artificial neural networks, massive data processing and parallel computing. They are also necessary for the development of technologies such as big data, cloud computing and artificial intelligence.

But why is it not possible to supply this high need for chips on a global scale?

The answer to this question lies in the high cost and sophistication of chip production technologies and processes.

The construction of an integrated circuit manufacturing plant costs between $10 billion and $20 billion, and takes years to complete. To this must be added the R&D investment cost of maintaining and upgrading the plants, as well as employee training.