There are many forms of transportation throughout the world. Some of these methods, however, require more semiconductors than others. The current shortage of semiconductors is having more wide-spread and significant impacts than society anticipated. Semiconductors find their way into many objects we use in our daily life including cars, computers, phones, and many more.
What are Semiconductors?
Semiconductors are materials which have a conductivity between conductors (generally metals) and nonconductors or insulators (such as most ceramics). There is a shortage of these materials due to a number of reasons including factory closures resulting from the Covid-19 pandemic and heightened demand for consumer electronics. As technology advances, there are more applications for semiconductors. Car manufacturers are no longer the only companies feeling the pinch, but the average person is bound to be affected by the shortage.
Short Term Effects
The short term effects may be more noticeable than people initially realize. One short term effect is higher prices for products that utilize semiconductors or even little to no availability for certain products. Many large manufacturers are struggling to produce, as well. Samsung’s co-chief executive, Koh Dong-jin, said at a shareholder meeting in March that there’s a serious imbalance in supply and demand of chips in the sector. At the time, the company revealed that it might skip the launch of the next Galaxy Note smartphone. There are plenty more tech companies that are struggling because of the shortage. This situation will make meeting revenue and profit goals even more difficult for tech companies. In turn, their market prices and value may decrease after quarterly results are revealed and estimates are not met.
Long Term Effects
This shortage not only affects the companies, but also will make a significant impact on society as a whole. As steps are being taken by car manufacturers to become more eco-friendly, much of the car production is currently being paused. For example, Tesla temporarily halted some operations at its Shanghai factory last month as the global shortage of semiconductors hit the electric car maker. Tesla is only one of many in the auto industry that is currently experiencing output setbacks. Less hybrid/electric vehicles also contributes to a decrease in environmental sustainability movements. This decline, in turn, directly affects society and the health of the people within it.
