Semiconductor chips are used in complex AI or devices as small as hearing aids. The semiconductor chip shortage affects every industry, whether producing life saving technologies or lifestyle luxuries. The semiconductor shortage is a global crisis.

It is another aspect of supply and demand that Covid-19 impacted. Technology experts say the worse is behind us, and contingency plans to correct the shortage are in place. However, experts predict a gap (a year or more) before new plans are fully operational. In the short term, industries are riding out the crisis. Here is a review of three industries managing the impact of the chip shortage.

MedTech Industry

The medical industry is beginning to feel the effect of the chip shortage. They are struggling because the wait time for components has jumped from four-eight weeks to 30 – 40 weeks. The short supply could increase equipment costs by 20%. The medical industry held its own but is concerned that their supplies are waning, and they may encounter shortages by the end of this year.

The medical industry produces life-saving technologies like; ultrasounds critical to treating patients with COVID-19, ventilators that help patients breathe, and EKGs that monitor the heart rate.

MedTech is not the largest user of chips; the medical industry produced only 1% of the semiconductor market revenue. However, the need for the chips is critical to preserve life. The medical industry urges the government to make MedTech a priority over other industries, including the auto industry.

The Auto Industry

The chip shortage had a strong and immediate impact on the auto industry. At the onset of the Novel Coronavirus, auto plants shut down and reduced or canceled supplies. When auto plants reopened, 1manufacturers could not meet the demand for microchips. Currently, many auto manufacturers are removing luxury features like heated seats, touchscreens, and HD radio to keep up with production demands.

Auto plants paused production and some companies hoard chips for luxury cars. The Mercedes EQS electric, luxury, sedan pre-pandemic cost was $67,900. The Mercedes unveiled last month has an estimated starter sticker price of $100,000. The auto industry is also reaching out to the government for assistance.

Digital Consumer Products

With digital consumer products, any device that is battery operated or can be plugged into an electrical outlet probably has a chip. Consumers who wake up to an alarm clock, check social media on their smartphone and wait for their coffee maker to brew a morning cup of joe use products that rely on semiconductor chips. Digital consumer product companies know technology rules, and their products are in demand.

Central Processing Unit (CPU) prices fluctuate wildly. Personal computers have been hit hard by the chip shortage. Alan Priestley, an analyst at Gartner, suggests consumers be flexible and be prepared to consider alternative parts if they need to purchase a new PC.

It takes thousands of steps to produce a single chip. Depending on the chip, the process can take 3 – 6 months, and every industry has different semiconductor requirements. There are government standards, intellectual property rights, licensing, etc. so, using chips between industries is not an option.

Long-term solutions

2Consultants in the Electric Vehicle (EV) industry believe gallium nitride (GaN) semiconductors are superior to silicon-based chips. These consultants believe GaN chips are the future and will replace current chips in five years.

3The Biden administration plans to invest $50 billion into semiconductor manufacturing plants in the US. President Biden stated that the chip shortage is a “top and immediate priority.” Intel has announced its plans to manufacture chips for the auto industry in their US plants.

Self-reliance is the key to our future

When signing the executive order, President Biden said, “We shouldn’t have to rely on a foreign country to protect and provide for our people. We need to sharpen America’s competitive edge by investing here at home.”

A McKinsey & Company report predicts that the semiconductor chip shortage will last through 2022, and this issue does not have a short-term resolution. Tech leaders across the board agree with that estimation. These long-term plans will take years to execute but demonstrate that the current chip shortage will eventually end.

  1. Benjamin Preston, Global Chip Shortage Makes It Tough to Buy Certain Cars, Consumer Reports, May 6, 2021,
  2. Neil Winton, New Faster, Lighter, Cheaper Technology May Solve Silicon Chip Shortage, Enhance Electric Cars, Forbes, July 22, 2021,
  3. Nandita Bose, and Stephen Nellis, As Biden works to fix chips shortage, Intel promises help for automakers, Reuters, April 12, 2021,