The global supply chain crisis

The global supply chain took a significant hit because of the Covid-19 pandemic. The stress on the supply chain started way before, during the ‘trade war’ between the US and China due to the two countries’ imposition of tariffs and sanctions. There was already volatility in demand and supply, but Covid-induced lockdowns put immense pressure on the global logistics industry, worsening the situation. 

The lack of workers across the supply chain resulted in congested ports, stalled ships, overloaded warehouses, delays, and eventually higher prices. It also increased the problem of getting goods to their final destinations. Continued delays in delivering crucial input items caused a decline in manufacturing.

Microchips and other semiconductors that constitute a significant part of products such as smartphones, computers and vehicles faced the direct impact of the supply chain crisis. The lockdowns shut necessary chip-making facilities in Japan, South Korea, China and the US.

The rise in the “work from home” culture increased the sales for electronic devices and created a bigger-than-anticipated demand for semiconductors chips, leading to a shortage in the industry. As per industry experts, there is a shortage of skilled workers  (engineers) to make those chips because of the pandemic and other factors. 

Global major chip supplier Taiwan Semiconductor Manufacturing (TSMC) is busy supplying US majors such as Apple, Amazon etc. On the other hand, automobile manufacturers had to cut production down due to the computer chip unavailability.