Asia “moves” the global economy

What are Semiconductors?

To get to the heart of the matter, semiconductors are silicon products that conduct electricity more than an insulator, like glass or wood, but less than a pure conductor, like aluminum or steel. Semiconductors act like tiny electronic switches that perform calculations inside technology products. This sophisticated creation is found in thousands of electronic products, from game consoles and microwaves to data centers powering the Internet.

Lack of semiconductors and the impact of chip shortages

Globally, there has been a recent shortage of semiconductor chips, as factories of automakers have been forced to shut down production amid the spread of COVID-19. As a result, a large chunk of the workforce began working from home, causing demand for devices to explode, and such demand exceeded what manufacturers could supply.

The semiconductor shortage has impacted many industries, especially the automotive industry. This means delayed car delivery orders and a limited supply. Recently, Japanese automakers reported a drop in sales in China as the chip shortage hit vehicle production hard. Honda’s car sales in China in September were down 28% from the previous year, Nissan recorded a 26% drop in September for cars sold in China, and Toyota recorded a 36% drop. The semiconductor shortage has affected many other industries as well, such as the world of smartphones. Apple recently announced that they would likely cut production of its iPhone 13 down to 10 million units due to the global chip drought as chip vendors including Broadcom and Texas Instruments struggle to respond. the overwhelming demand for semiconductor chips.

Lưu Đỗ Hoàng Anh, Financial Analyst Alpho

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