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Ralph Nelson

Newsbreak 4/9: What Happens When The Chips Are Down?

We’re on the brink of a global pause of production for all the things that keep us most connected, particularly during a pandemic: from computers, phones, and iPads to vehicles, manufacturing is being threatened by a shortage of the chips that are so essential to the circuit boards of all kinds of tech.

Today, Apple announced that it would be postponing its MacBook Pro and iPad production citing logistical breakdowns. GM announced that it would be halting production at several of its major North American plants for the same reason.

Exactly why we’re facing what may seem like a sudden shortage has been brewing for months. Consumer demand for semiconductor related products surged in 2020, lifting sales by 6.3%. Demand is likely to stay high in 2021 as companies continue to rely on integrated tech and make pushes towards tech that’s green friendly. Samsung clued us in on all of this last month, shortly after the Texas deep freeze shuttered Samsung Electronics, the world’s largest chip manufacturer. Chip logistics were further complicated by a fire at a Japan based chip producer.

The demand for chips may seem bleak at the moment, but it’s prompted a bevy of responses, with everyone from President Biden to Elon Musk chiming in. Biden will meet with industry leaders next week as he pushes for legislation which would use $37 billion to kickstart domestic semiconductor production. Two semiconductor companies announced that they’d invest billions in the coming years to increase production. And, in classic Elon Musk fashion, the Tesla maverick tweeted a glib appreciation of Tesla’s chipmakers, suggesting that Tesla, unlike Apple and GM, has nothing to worry about.

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