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The Beginning of the End of the Shortage

Danny Blodgett | August 9, 2021 | 68 views

Since my last blog post warning about those who were predicting a "new paradigm" of shortage in the semiconductor industry, the media have been shouting about the "chip crisis" alongside the typical daily news diet of disaster and calamity that we have come to expect in the time of COVID. The chip shortage coverage helped create a sense of national anxiety that we were all too reliant on China for semiconductors and, in general, that semiconductor supply was dwindling. The predictable response from governments around the world was to announce plans to stimulate their respective domestic semiconductor manufacturers into expanding chip production capacity.

Fast forward a few months, and we are now finally seeing some light at the end of the chip shortage tunnel. Yet, in the wake of all the proclamations and commitments about investing in new chip capacity, we also now see manufacturers going forward with actually starting to build new plants that won't come online for another couple of years. The result, as I said in my last post: overcapacity.

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