The Semiconductor shortage

Semiconductors are defined as  crystalline or amorphous solids that have electrical conductivity opposite at temperatures to those of metal, higher electrical resistance than typical resistant materials, but still of much lower resistance than insulators.  Semiconductors can be pure elements, such as silicon or germanium, or compounds such as gallium arsenide or cadmium selenide.

Some facts about Semiconductors :

1. Conducts electric current less than a conductor and higher than insulator.

2. Has high resistance and negative temperature coefficient.

3. Formed due to covalent bonds

4. A semiconductor chip is an electric circuit with many components such as transistors and wiring formed on a semiconductor wafer. An electronic device comprising numerous of these components is called Integrated Circuit (IC), and can be found in electronic devices such as computers, smartphones, appliances, gaming hardware and medical equipment.

Taiwan is the world’s leading producer of semiconductors and other electronic components.The Taiwan Semiconductor Manufacturing Company (TSMC) has more than 55 per cent of the global market share in the production of high-end custom-made chips.Of the two rival companies that have survived, US-based Intel is in trouble and Korea’s Samsung has challenges of its own.

Due to the pandemic and the series of lockdowns being imposed, the world has been facing a shortage of semiconductors which has been affecting the industries dependent on them.The increase in chip consumption over the last decade is also partly attributable to the rising contribution of electronic components in a car’s bill of materials.Especially the car manufacturers and consumer electronics manufactures, have not been receiving enough of this crucial input to continue production.

This shortage has caused delayed vehicle deliveries, as carmakers in order to make just in time car deliveries , typically kept low inventory holdings and relied on an electronics industry supply chain to feed production lines as per demand. This has not only affected the international markets , but also affected the India based vehicle manufactures to curtail the production.

Also due to geopolitical tensions in Taiwan , prominently from China, this has opened an opportunity for India to realize it’s capacity and make positive changes in it.It should make extra efforts to solidify strategic-economic cooperation between Delhi and Taipei and make them more stronger.

Trade has increased from about $1 billion in 2001 to about $7 billion in 2018 . India has made a special effort to woo Taiwanese companies that are moving some of their production away from China.

India should continue to make it’s presence in Indo- Pacific stronger, and also come to terms with Taiwan’s critical role in shaping the strategic future of Asia’s waters.