Microchip Shortage Causes Production Problems, Price Increases

Researched by Industrial Info Resources (Sugar Land, Texas)--As the ongoing shortage of microchips has deepened, the short-term effects have been widely noted-- namely, slowdowns in automotive production and consumer goods such as smart phones, laptop computers, video game consoles and other tech-laden devices, according to USA Today. This has of course led to price increases as well, following basic supply/demand economic rules. The major semiconductor producers were already in the process of expanding production to address trade imbalances and now also will meet the new situation in the world marketplace.

Industrial Info is tracking 51 capital projects across North America valued at approximately $33.4 billion to improve and expand semiconductor production. Click here for a list.

Unfortunately, some of these projects will not be complete for two to three years, if not longer. Meanwhile, prices for autos and other electronic devices will continue to climb, and availability will be diminished. And in the long run, will there be a point in the future where we may see a glut of microchips in the market as these expansions are completed?

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