How Should Payment Card Ecosystem Players React to the Chipset Shortage?

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By Phil Sealy | 3Q 2021 | IN-6211

 

Why is There a Chip Shortage?

NEWS


It has been well documented that the semi-conductor industry is currently going through a high level of uncertainty. Driven by recovering economies as well as the continued upward trajectory of hyper-connectivity and subsequent requirement for computing power, the demand for chips is expected to exceed all expectations in 2021 and it is already clear that supply cannot currently keep up with increasing demand.

COVID-19 is partially to blame, thanks to increased orders for computing devices to work from home and gadgets for entertainment purposes. This was alongside the 2020 downfall of the automotive industry, where OEMs significantly reduced their respective chip orders, leading the foundries to retune fabrications to supply other in-demand chip types. In addition, Huawei added to the pressure by increasing their orders for stockpiling purposes in reaction to the U.S. and China trade war.

The automotive and consumer electronic segments have done a great job at educating the market, bringing their expectations related to the chip-set shortage and how it will impact them and their cu…

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