The Asian microchip industry may be the solution to the shortage

The Asian microchip industry may be the solution to the shortage


In recent months microchips have been gradually becoming scarcer and scarcer, leading the industry into a global-scale crisis due to lack of microchip production. Microchips are more important than people think and all electronic devices used in our daily lives use them, such as smartphones. At first, this shortage was due to the pandemic and production stoppage. However, over the months, COVID restrictions have been lifted, but the microchip manufacturing industry has yet to recover.

The shortage has intensified. The cause is the constant rounds of blockades imposed in Southeast Asia, which means production is not keeping pace and only a certain percentage of the necessary microchips are being produced. This problem affects many other industries, so several sectors are looking for solutions to compensate for the shortage.

Also, the lack of this material is being felt all over the world, especially in the poorest countries. Indeed, the production and purchase of new gaming devices are not easy, especially for gamers. The constant purchase of new devices is essential for the industry to thrive. However, while this problem still remains to be solved, it is possible to access gaming sites. For these games, there is no need to update pcs and you only need a good internet connection. Now you can search for classic games like Tomb Raider in your browser and play as they were once played on the PS1 or play online roulette India as if you were in a casino. You can play for free or for real money, and it all depends on the player. In addition, you are eligible for bonuses such as welcome bonuses. All without leaving home, enabling you access by connecting from your pc or mobile device and not having to worry if it is safe or legal since they are officially licensed.

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Industries affected by microchip shortage

This microchips shortage also affects consumers, not just the companies that require them for manufacturing. During the pandemic, massive demand for technological devices showed how important they are because, without them, the manufacturing of televisions, cell phones, laptops and others simply cannot be completed. The automobile industry also fell in Asia. In China, for example, car manufacturing rates fell up to 20% in August because there were no microchips to install in cars. Meanwhile, in the United States, this issue also strongly affected their industry as car production fell by a margin of 72%, as they added less than 1 million new cars for sale.

All car manufacturing companies in Asia were affected, including those abroad, since most microchips manufacturing industries are located in the Asian market sphere. This means that if there is no microchip production, there will inevitably be a lack of resources because there needs to be more of them. During this crisis, the Toyota brand decreased production of 430,000 new cars units in September; the same happened in October. As the aforementioned brand cannot produce the expected percentage of cars due to microchip scarcity, this will inevitably lead to short- and long-term losses.

Possible solutions to the microchip problem

The solution lies in supporting the big producers in Southeast Asia: Malaysia and Taiwan. Malaysia practically monopolizes the market with over 50 semiconductor multinationals, while Taiwan is also a leading producer of these microchips. The problem lies in the new variants of COVIC, such as the Delta variant, which has seriously affected Malaysia’s market. As soon as the coronavirus epidemic is under control, Malaysia will lift restrictions and everything is expected to return to normal when they reach back pre-pandemic production rate levels.

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However, another way would be to expand production to other Asian countries that are interested. This means that production would not be relegated to only a few countries. Therefore, between 2020 and 2021, microchip-producing countries were expanded by 8% in terms of capacity. By the end of 2022, microchip factories’ capacity is expected to increase up to 16%.

Finally, there is an effort to centralize microchip production, as it is actually very fragmented among different countries. This means that if a single weak link breaks down, just as it has happened with Malaysian semiconductors, the whole chain of production breaks down. Vietnam, with foreign investment, is closely looking at this centralized production and thus developing its local industry. A serious problem has been identified due to this global shortage crisis, and new possibilities to strengthen the sector are opening up.

Ayhan Fletcher

"Subtly charming zombie nerd. Infuriatingly humble thinker. Twitter enthusiast. Hardcore web junkie."

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