Chip shortage affecting auto, appliance industries
Life is slowly getting back to "normal," but effects of the pandemic still linger. Many industries have been impacted by the global chip shortage and consumer’s bank accounts are feeling it.
NewsChannel 13 spoke with an expert at GlobalFoundries in Malta to learn more.
"I think you’ve just got a look around you pretty much everything you see has a chip inside it from your phone to your refrigerator cars just about every electronic device that we all have these days,” said
Peter Benyon, General Manager at GF Fab 8 in Malta.
Benyon said while it’s true the pandemic forced sales related to working, schooling and entertaining at home, the rise in demand for semiconductors won’t slow down anytime soon.
"We’re not just seeing a Covid demand bubble here,” he said. “Technology in general is becoming far more pervasive with really accelerated growth rates. I get an almost everything around you these days has a chip in it and there’s a high chance that those chips were made by GlobalFoundries."
It’s not just the pandemic that’s affected the supply chain. A recent fire at a Japanese plant and severe weather in Texas are also to blame.
The auto industry has been impacted by the shortage significantly. In fact, the U.S. Bureau of Labor Statistics said used-car prices jumped nearly 30 percent between May 2020 and May 2021. Edmunds estimates new car inventories are down nearly 50 percent from this time last year.
That means your trade in is probably worth more than you’d expect. On the flip side, buying new is going to cost you.
Benyon expects the chip shortage to last at least through this year, possibly into 2022.
"There’s a soaring global demand for chips right now and unfortunately only 12 percent of those chips are made here in the US and that represents a significant economic and supply security threat for us here,” he said. “Clearly there’s a need to establish a more significant semiconductor manufacturing footprint here in the US."
Increased capacity is a big reason why GF decided to relocate headquarters to Malta, as it’s their largest manufacturing site.
"I think what you’ve seen here with the supply and demand dynamic it’s much tied to relationships growing much stronger partnerships between the semiconductor manufacturers and the users of those chips,” Benyon said. “I think that’s going to benefit GlobalFoundries in the industry as a whole moving forward."
Some other items you may be paying more for amid the chip shortage include televisions, appliances and laptops.