Why are There Weak Links in the Chip Supply Chain and Who is Impacted?

The world’s manufacturing supply chains are showing signs of strain and semiconductors or “chips” are among the hardest hit. The combination of the pandemic policy decisions and the growing demand for electric vehicles created a perfect storm for the industry.

“This is an industry issue, of course. We’re working every single day with a cross-functional team to look for opportunities of how do we minimize the impact”, said GM’s Chairman and CEO Mary Barra. In January, Honda said it will cut domestic output at one of its Japanese factories, while Nissan is adjusting production of its note hatchback model. GM announced this week that it’s extending temporary shutdowns at three of its North American plants because of the ongoing semiconductor shortage.

It’s not just car makers. A shortage of chips affects everything from 5G phones to medical devices. Huawei Chief Security Officer, Andy Purdy, had this to say, “A combination of a coronavirus and the impact on not to be too technical. The entity left with the ability of American companies to sell the loss and others. It’s really had a very negative effect on us.”

The shortage has gotten so bad that President Biden stepped in this week with an executive order directing a government wide supply chain review for critical goods. “We need to make sure these supply chains are secure and reliable. I’m directing senior officials of my administration to work with industrial leaders to identify solutions to this semiconductor shortfall”, said President Biden. The problem has been brewing since 2019. And President Donald Trump’s trade war with China also played a part in the supply crunch. Roughly 10% of the world’s chip production comes from SMIC, a semiconductor company that’s partially owned by the Chinese government. In 2020, the US restricted American companies from selling to SMIC.

The US continues to look for long term solutions to this supply chain crunch, but for now the country is working to quickly improve domestic production rates.

*Bloomberg contributed to this content


Follow us on social media for the latest updates in B2B!


Lake Powell
Exploring the Splendor of Lake Powell with Up Lake Adventures
November 29, 2023

Delving into the serene beauty of Lake Powell, the Icom Podcast “Radios in Action” pairs the thrill of personal watercraft adventures with the crucial use of marine radios. Host Ray Novak and Bob Reed, the Manager of Up Lake Adventures, discuss the enthralling experiences offered by Up Lake Adventures in Utah’s majestic landscapes. In […]

Read More
workplace fit
Wrong Fit, Right Fit: The Essence of Workplace Fit and Its Impact on Modern Work Culture
November 29, 2023

Workplace fit in an organizational context has never been more critical. The wrong fit impacts the entire culture. In this post-COVID-19 era, understanding workplace fit has reshaped how people view work, emphasizing the importance of aligning personal values with organizational culture. A revealing statistic reveals that 67% of employees prefer to work for a […]

Read More
remake medicine
Art is Helping Remake Medicine
November 29, 2023

Can art help remake medicine with the therapeutic potential to make a difference in healthcare? The rise of holistic approaches to well-being provides an opportunity to bring out the artistic side in healthcare. And on the latest episode of the Healthcare Rethink Podcast, host Brian Urban takes a deeper look into that intersection between […]

Read More