Title: Why Is There a Computer Chip Shortage? Cars, Tech Face Supply-Chain Issues
Headings: Here's why there's a global computer chip shortage that is slamming automakers during the pandemic
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Here's why there's a global computer chip shortage that is slamming automakers during the pandemic
Katie Canales
Vauxhall car factory in April 2020.
Automakers and consumer electronics companies are vying for computer chips
The shortage doesn't look like it will let up any time soon
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Content: The upgraded technology in gaming consoles and 5G smartphones in particular require a lot more power, and therefore rely more on chips than previous generations. Since March, when the pandemic set in, consumer demand has surged for vehicles and for devices like smartphones and gaming consoles that people can use for entertainment while stuck at home. Automakers like General Motors, Toyota, Ford, and Subaru, to name a few, were forced to close factories around the onset of the pandemic. When the factories reopened, customer demand for cars had skyrocketed as people, stimulus checks in hand, jumped at the opportunity for low-interest rates and a way to get around that didn't involve mass transportation. Automakers responded by ramping up production to maximum levels, further driving up demand — and competition — for computer chips. Read more: Wall Street is worried that Intel's disappointing earnings are a sign that its terrible year will only get worse: ' 2021 seems like a messy year'
Meanwhile, chip industry players like Intel were already struggling to keep up with demand, even since before the pandemic. And chipmakers overseas were also experiencing supply chain disruptions as the pandemic forced them to close down factories. Even with chipmakers that are doing fairly well during the pandemic, like Taiwan Semiconductor Manufacturing Company — which produces more than half of the world's computer chips and is also Apple's primary supplier — there still isn't enough supply to go around.