Industries around the world are facing production challenges due to an unprecedented global microchip shortage. Goldman Sachs determined 169 industries have been critically impacted by the shortage – from automotive, home appliances, breweries, and even soap manufacturing.  Businesses requiring microchips and related components for production now face substantial cost and lead-time increases, including Touch International (TI) and Touch International customers.

The Covid-19 pandemic triggered the global chip shortage. The world watched as China was first to lockdown under stay-at-home orders in efforts to ease the spread of the virus. As the pandemic spread globally, so followed the stay-at-home orders. Semiconductor foundries shut down, and production halted around the world. The lockdown also forced tighter restrictions at ports and international borders, slowing the supply movement and exacerbating the chip shortage.  At the same time, the public faced a new lifestyle of remote working, schooling, and socializing. The need for home offices, at-home-classrooms, and new forms of entertainment, spurred an increase and sudden demand for electronic devices that rely on semiconductors. These and other factors have caused intense stress on the supply chain.

The pandemic has made it evident that diversifying resource production and allocation is vital to keep a healthy supply chain. Globally, industry leaders and governments are working to ease the strain on manufacturing and looking toward production and resource independence. June 2021, the United States Senate passed the United States Innovation and Competition Act (USICA) which includes $52 billion in federal investments for CHIPS for America, recognizing the crucial role the U.S. semiconductor industry plays in its future. Bloomberg reports that the European Union set a goal in 2020 to produce 20% of the world’s semiconductors, involving redeveloping existing foundries or building new ones to lessen reliance on Asia and the U.S. for technology resources.