Global Semiconductor Shortage
The Global Semiconductor Shortage was a 2020 to 2023 shortfall of computer chips that disrupted production of cars, electronics, and appliances after pandemic demand shifts collided with limited chipmaking capacity.
What happened and why it matters
The chip shortage showed how one scarce component can stall entire product lines, and it changed how manufacturers think about lean inventory. Automakers cut chip orders early in the pandemic, then found suppliers had shifted capacity to booming consumer electronics; factory shutdowns, including COVID lockdowns in Malaysia, made it worse. AlixPartners estimated in September 2021 that the shortage would cost carmakers $210 billion in revenue and 7.7 million vehicles of lost production that year. Brands selling electronics faced backorders and allocation. Many companies now keep more buffer stock of critical parts and sign longer supply commitments.