Semiconductor Chip Shortages (2022-1)

This policy brief provides an overview of the current state of the semi-conductor industry, where the semi-conductor industry is heading, and a prediction of when the industry will be fully recovered from the COVID-19 pandemic. [...] The implementation of various forms of restrictions to halt the spread of COVID-19 reduced the production of semiconductor chips. From a supply perspective, as levels of shipping supply decreased, the costs of shipping containers increased. [...] The shift is coming in the core manufacturing of semiconductors as companies move to a strategy of manufacturing in excess (just in case Vs just in time approach) instead of sticking to the demand flow. [...] In East Asia Japan approved a $338 million research project in summer of 2021 to improve their capacities in the industry. However, the dangers of overproduction would reduce the 4 . [...] They predict that as production is reallocated, chips are redesigned, inventories return to pre-pandemic levels, and the excess demand that developed in 2021 falls, the shortage of semiconductors will naturally subside.  • In the second quarter of 2021, smartphone original equipment manufacturers were reporting that they were missing 20% of their required key components as a result of the supply c.