Decoder with Nilay Patel Everything you need to know about the global chip shortage
Aug 31, 2021
Dr. Willy Shih, a Harvard Business School professor and semiconductor expert, dives into the global chip shortage that has crippled various industries since the pandemic. He discusses how the imbalance between supply and demand has left major automakers with unfinished vehicles and limited availability of consumer electronics. Shih emphasizes the importance of TSMC and the complexities of semiconductor manufacturing. He also reveals the challenges and financial hurdles of U.S. semiconductor production in a rapidly changing global landscape.
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Auto Industry Slump
- The 2020 auto industry slump prompted carmakers to cancel chip orders to conserve cash.
- This created an opening for other industries, like consumer electronics, to absorb available chip capacity.
Chinese Stockpiling
- US sanctions against Chinese companies spurred them to stockpile chips, adding pressure to the supply chain.
- This exacerbated the chip shortage by driving up demand and depleting available stock.
Commodity Chips
- Many chips are commodities using older technology and not constantly innovating.
- Automakers prioritize stable, proven chips, unlike the consumer tech industry's constant push for newer technology.