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| 2019–2021 chip shortage | |
|---|---|
| Name | 2019–2021 chip shortage |
| Caption | Semiconductor fabrication facility landscape |
| Date | 2019–2021 |
| Location | Global |
| Cause | Supply and demand imbalance, COVID-19 pandemic, trade measures, natural disasters |
| Effect | Production delays, price increases, strategic investments |
2019–2021 chip shortage
The 2019–2021 chip shortage was a global disruption in the supply of semiconductor components that affected multiple sectors and regions. The crisis involved complex interactions among supply chain nodes, including foundries, assemblers, and distributors, and generated responses from national leaders, multinational corporations, and trade organizations. Major technology firms, automotive manufacturers, consumer electronics brands, and financial institutions were drawn into negotiations and strategic planning to mitigate shortages.
The modern semiconductor industry traces its lineage through pioneers and institutions such as Intel, Advanced Micro Devices, Texas Instruments, Bell Labs, Fairchild Semiconductor, and NVIDIA across hubs like Silicon Valley, Hsinchu, Tokyo, and Seoul. Global production architectures rely on specialized firms like Taiwan Semiconductor Manufacturing Company, Samsung Electronics, GlobalFoundries, and TSMC alongside equipment suppliers such as ASML Holding, Applied Materials, Lam Research, and KLA Corporation. Financial actors including Goldman Sachs, Morgan Stanley, and BlackRock set capital flows that shaped investment in fabs and design houses like Qualcomm, Broadcom, MediaTek, and Xilinx. Earlier disruptions—illustrated by events involving Fukushima Daiichi, Tōhoku earthquake and tsunami, and supply responses after Hurricane Maria—informed risk models used by firms including Toyota Motor Corporation, Volkswagen Group, General Motors, and Ford Motor Company.
Multiple triggers converged: a demand surge from consumer electronics makers such as Apple Inc., Samsung Electronics, Sony Corporation, Microsoft, and Sony Interactive Entertainment; pandemic-induced shifts described by entities like World Health Organization and Centers for Disease Control and Prevention; trade measures involving United States Department of Commerce, Ministry of Commerce of the People's Republic of China, and sanctions affecting firms such as Huawei Technologies and ZTE Corporation; plus supply interruptions from natural events linked to suppliers in regions overseen by authorities like Ministry of Economy, Trade and Industry (Japan). Capacity constraints at fabs run by TSMC, Samsung, GlobalFoundries, and Intel were compounded by production scheduling decisions at packaging houses like ASE Technology Holding and distributors such as Avnet and Arrow Electronics. Policy actions by Office of the United States Trade Representative and trade negotiations involving European Commission and World Trade Organization further influenced component flows to OEMs including Dell Technologies, HP Inc., Lenovo, and Acer Inc..
Automotive producers such as Toyota Motor Corporation, Volkswagen Group, General Motors, Ford Motor Company, Renault, and Stellantis faced plant stoppages and model delays due to missing microcontrollers and sensors sourced from suppliers like NXP Semiconductors, Infineon Technologies, and Renesas Electronics. Consumer electronics companies including Apple Inc., Samsung Electronics, Sony Corporation, Nintendo, and Microsoft experienced product shortages and deferred launches affecting retail partners like Best Buy, Walmart, and Carrefour. Data center operators such as Amazon Web Services, Microsoft Azure, Google Cloud Platform, and Alibaba Cloud adjusted procurement for processors from Intel and AMD while networking vendors like Cisco Systems, Juniper Networks, and Arista Networks reported lead-time extensions. Industrial equipment makers including Siemens, General Electric, and Schneider Electric saw supply disruptions for programmable logic controllers and power management ICs, influencing firms like BASF and Siemens Energy.
National strategies included announcements from leaders and agencies such as United States Department of Commerce, European Union, Ministry of Industry and Information Technology (China), Prime Minister of Japan, and Taiwan Ministry of Economic Affairs to expand domestic capacity and stockpiles. Major investments were declared by corporations and consortia including TSMC, Intel, Samsung Electronics, GlobalFoundries, SK Hynix, Micron Technology, ASML Holding, and alliances involving Foxconn and Pegatron with financing from banks like Bank of China and Deutsche Bank. Regulatory responses invoked bodies such as Committee on Foreign Investment in the United States, European Investment Bank, and national technology initiatives like CHIPS for America to incentivize semiconductor fab construction and research programs at institutions such as Massachusetts Institute of Technology, National University of Singapore, University of Cambridge, and Tsinghua University.
Logistics players including Maersk, Mediterranean Shipping Company, Hapag-Lloyd, United Parcel Service, and DHL faced container shortages and port congestion at hubs like Port of Los Angeles, Port of Shanghai, Port of Singapore, and Port of Rotterdam. Semiconductor supply chains depended on specialized materials from suppliers such as SUMCO Corporation, Shin-Etsu Chemical, Wacker Chemie, and BASF as well as on lithography equipment by ASML Holding and ion implantation tools by Tokyo Electron. Inventory practices influenced by firms like Toyota Motor Corporation’s lean manufacturing philosophies contrasted with stockpiling moves by Apple Inc. and automotive procurement teams at Volkswagen Group and Ford Motor Company. Freight rate spikes reported by Clarksons and shipping alliances such as 2M Alliance increased costs and lead times, compelling OEMs and distributors like Avnet and Arrow Electronics to renegotiate contracts.
The shortage reshaped industrial policy discussions in forums such as G7 summit, APEC, and United Nations General Assembly, prompting investment shifts and supply chain realignments that affected currencies monitored by Federal Reserve System, European Central Bank, Bank of Japan, and People's Bank of China. Geopolitical tensions involving United States, People's Republic of China, Taiwan, European Union, and Japan led to export controls and subsidy programs impacting corporations including Huawei Technologies, SMIC, TSMC, Intel, and Samsung Electronics. Strategic stockpiling decisions by national defense institutions like United States Department of Defense and procurement changes at aerospace firms such as Boeing and Airbus highlighted security considerations tied to suppliers like Raytheon Technologies and Lockheed Martin.
Recovery trajectories varied as fabs ramped capacity under projects backed by TSMC, Intel, Samsung Electronics, GlobalFoundries, and Micron Technology while semiconductor equipment suppliers ASML Holding, Applied Materials, and Lam Research expanded shipments. Ongoing risks remained from demand volatility at companies like Apple Inc., Tesla, Inc., NVIDIA, and AMD; geopolitical pressures involving United States and People's Republic of China; and logistical fragilities at ports including Los Angeles and Shanghai. Research collaborations among universities such as Massachusetts Institute of Technology and agencies like National Science Foundation aimed to diversify ecosystems, while financial markets tracked chipmakers via indices managed by Nasdaq and New York Stock Exchange.