An investigation warns that chip production is very vulnerable to disasters, geopolitical tensions or other problems. But solving that costs a lot of money.
That the production of computer chips, be it for cars, game consoles, computers or other purposes, is under pressure is an understatement. There has been a shortage worldwide for months, which means that production at various car manufacturers is currently at a standstill.
The Semiconductor Industry Association, the industry association that brings together most American players, has now released a study that Reuters could see. This confirms that the sector’s supply chain is particularly vulnerable because many suppliers are concentrated in specific regions.
They point to fifty points in the supply chain where one region has more than 65 percent market share. For example, the intellectual property and the software for chip design are mainly located in the US. Certain gases for the production process mostly come from Europe, and their production takes place almost entirely in Asia. 92 percent are in Taiwan.
Even apart from the corona crisis, it became clear how vulnerable the market is in the past year. Last year, demand turned out to be much greater than what could be produced in Taiwan. In the meantime, the country is also struggling with drought, which makes production less evident.
