Title: Why We’re in the Midst of a Global Semiconductor Shortage
Headings: Why We’re in the Midst of a Global Semiconductor Shortage
Supply chain
Why We’re in the Midst of a Global Semiconductor Shortage

Content: At the same time, American firms were cut off from chips made by China’s Semiconductor Manufacturing International Corporation after the federal government blacklisted the firm. In July, a fire at a Japanese factory cut off supplies of special fiberglass used for printed circuit boards. Then in October, a fire at a Japanese plant belonging to Asahi Kasei Microdevices took advanced sensing devices used in automotive and other industries out of circulation. As of late February, the plant was still down. As if all these disruptions weren’t enough, there have also been constraints in the global transportation system. According to Clear Metal, which monitors over 90% of ocean freight, nearly 7% of ocean freight is not making it out of China ports this quarter. Shortages of shipping containers resulted in companies having to pay premiums for shipping and drove demand towards airfreight. But the airfreight system has been experiencing higher demand due to global shipments of the Covid-19 vaccine even as its capacity has been reduced due to the pandemic-related drop in passenger travel, which has meant that there are fewer passenger planes available to carry freight. In fact, global air-cargo capacity in first quarter of 2021 is 25% less than last year . The grounding of the Boeing 777 fleet with Pratt & Whitney engines following the failure of an engine on a plane over Colorado has further exacerbated capacity constraints.