Semiconductors Emerging as Frontiers in the Electronic Goods

With companies striving hard to tackle chip shortages in semiconductors, one critical recommendable approach is to combine the alternative approaches via a resilient supply chain and better inventory planning.

FREMONT, CA: In light of the pandemic, political sanctions, or higher demand than supply, electronic products like sensors and semiconductors are experiencing widespread shortages worldwide. While the impacts can be devastating and hazardous, various crucial economic sectors are under the influence of this massive strike and are highly fazed by the chip shortage globally.

Though the impact of global chip shortages hit industries generally, the vehicle industry is likely to undergo disruptions as an after-effect. Researchers predict that the ongoing issue will likely reach 60 billion euros or more, which it has already surpassed by 33 per cent, to reach 90 billion euros in the automotive industry. A steady decrease in sensors and electronic parts production and availability has triggered a temporary halt in production by automakers, implying a higher unemployment rate, slower economic recovery from the pandemic, and reduced vehicle production. Similarly, the vehicle production estimate is down by 5 million, forcing automobile innovation leaders to reduce their production count.

Whereas, surging demand in consumer electronics is likely influencing the shortages in chips with the advent of the pandemic, where laptops and mobile devices began gaining momentum with the diminishing usage of desktop PCs. As students began to use virtual learning in the classroom and employees began working from home, consumer electronics sales increased by nearly 55 per cent and are expected to rise further in the coming years. Likewise, gaming consoles are also becoming crucial in the market. Thus, in the forecast period of 2027, the consumer electronics sector is likely to achieve a compound annual growth rate of 5.3 per cent, accelerating revenues up to 51 billion USD.

In addition to their popularity, the requirements for semiconductors and sensors are increasing accordingly. Yet, the chips designed for cars barely fit into consumer electronics, while innovation frontiers are all set to introduce promising solutions to address the chip shortages that often lower profitability for companies. Moreover, it also leads to an unprecedented rise in consumer prices, making goods less available for people globally.

On account of the pandemic invasion, construction, remodelling, and improvement for residential and commercial properties are emerging at a slow pace, which reduces smart home demand alongside. The chip shortage typically impacts the LED supply, which is a comparatively more sustainable option than halogen, incandescent, and fluorescent. Similarly, with a mere nil chip shortage, the prices of LED raw materials are in a decline that proportionally increases the cost-effectiveness and competitive nature of the product. Mini LED lights, which are used in televisions and smartphones, have a different history and are likely to be stockpiled since 2020. The prices for the commodities are surging by an average value of 10 per cent, affecting companies’ inventories and thus impacting the LED supply chain.