Industry reeling from chip crisis

It has had a huge impact on the pharmaceutical and automotive industries as the use of chips in all these industries has increased rapidly in the last two decades.

Abhishek Kumar Singh

It is not just a phrase that even a small creature like an ant can move a giant like an elephant. In fact, there are many examples in the physical world that prove that even the smallest things sometimes become so important that they can shake the world. If you want to connect this law with any problem of the present time, then the lack of a small-looking chip used in the field of electronics has created a big problem.

This chip is actually a semiconductor (semiconductor) and during the Corona period there has been a huge reduction in its manufacture and supply. This has had a huge impact on everything from the electronics industry to the pharmaceutical and automotive industries as the use of chips has grown exponentially over the past two decades in all these industries. According to an estimate, at present, about two hundred and fifty types of industries manufacturing electronic goods are facing the problem of shortage of chips.

If we want to assess the impact of the lack of chips, then the news coming from various industries in the last few months gives an idea of ​​this. Recently, Tata Motors, one of India’s largest automakers, spoke of a reduction in production of one of its flagship brands. Production of expensive vehicles like Mercedes-Benz, Audi and BMW has also come down due to lack of chips. Earlier, all other car companies have admitted to the delay in the supply of cars falling in the expensive category.

The condition is that customers have to wait for eight to ten months. And the matter is not just limited to vehicles, chips are used in the manufacture of smartphones, computers, laptops, televisions and even medical devices-machines. Therefore, now there has been a hindrance in the supply of every item, in which the chip is used. Therefore, it would not be wrong to say that the chip has become the axis of the global economy in a way. The problem is also serious because it may take another year and a half for the manufacture and supply of chips to return to normal. Major companies that supply chips to auto companies – Bosch and Samsung – have already made it clear that there could be a shortage of chips for a year.

Although all the economic activities stopped during the Corona period can also be linked to the chip production crisis, but this is not the only reason behind it. Other factors that affected the functioning of chip makers, which were battling low attendance of workers and workers, included China-Taiwan tensions and major reasons such as the fire in Japan’s chip maker ‘Renaissance’. On the other hand, after the deepening of the chip crisis in the world, America stopped the supply of American chips to many Chinese companies like Huawei. But the bigger reason than this was that during the Corona period, the demand for electronic goods increased rapidly all over the world.

Most of the economic activities started online from studies. Electronic goods like smartphones, laptops, computers are made of chips, so the crisis increased due to lack of supply of chips according to the demand. Not only this, due to the ban on the means of public transport during the Corona period, the demand for cars also increased. Since most of the cars nowadays are equipped with electronic components and features that use chips, this chip suddenly became one of the elements in high demand.

In such a situation, it is important to know what is in the chip that it has become an integral part of the electronic goods. In fact, today the chip has become an integral part in the manufacture of electronic goods. It is not possible to manufacture them without chip. It is very interesting to know from this what is the role of a chip in an electronic item and how it works. In the language of science, semiconductors are considered to be the link between conductors and non-conductors (insulators). On this basis, the potential element between the metal and the ceramic, ie the chip, proves to be important in the matter of passing electricity through itself.

Often chips made of elements such as silicon or germanium are added to alter their conductivity by adding some other metal. The advantage of the chip is that the electronic equipment does not stop working when the temperature increases. Plus, there is no need to make as elaborate arrangements to keep the equipment cool and the flow of electricity through it as before. This work is done on very small chips ie semiconductors. This has helped in reducing the size of all electronic devices including computers. Today, the size and type of computers, laptops, televisions have become less possible than before because of the fact that the role of chips is at its center. Apart from this, the charisma of the chips is also behind the touch screen or touch button devices.

In such a situation, the question is bound to arise that when the chip is such an important thing, then why are the companies making it limited to a few countries in the world. Most of the major chip makers are currently in Taiwan and the US. Taiwan’s famous Taiwan Semiconductor Manufacturing Company (TSMC) produces a quarter of the world’s demand for chips. It is even claimed that despite all the displeasure, if China is not able to take any major action against Taiwan, then it is the semiconductor ie chip at its center because if Chinese action stops chip production in Taiwan, then thousands of China’s electronic The kiln of companies will sit.

Actually making a chip is not easy. There are four-five stages of its construction, which is not easy for everyone to master. Then there is the issue of patents. No company can make a chip without a patent and the hefty fee of patent becomes a big obstacle for every other company. Therefore, the world is dependent on select companies for the supply of chips. However, seeing the demand for chips, many big companies want to set up their plants in different countries of the world. But for this, many infrastructure facilities are required as mentioned in China and on the basis of which even Apple has set up its plants for iPhone in China. But there has been a perception about China that technology is easily stolen there, so big companies no longer want to take their projects there.

In such a situation, good opportunities are being created for chip manufacturing in India, provided the government pays attention to it. There is no problem in India regarding the availability of both raw material and labour. The problem lies at the policy level, in which the central and state governments have a role to play. Recently, two major automakers have closed their factories in India, which has sent a negative message about India in the international industry. Therefore, if India has to become a center for manufacturing chip-like items from the leader of IT or software, then there will be no better opportunity than this.

Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.

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