We are still hurtling toward Chippagedon

The world is witnessing an unprecedented chip crisis which shows no sign of ending. It may be a tough couple of years with chip demand going up and supply not being able to keep up

- Sunil Rajguru

What is Chippagedon?

The term was coined as a combination of two words: Chip and Armageddon. It refers to the global shortage of chips that took place as an aftermath of the Covid crisis. The first to see production problems was the car industry and there were reports of gaming consoles being affected. Also spelt as Chipageddon.

Why is it happening?

The Covid crisis and lockdowns led to a series of supply chain disruptions all over the world for many materials and products. Additionally, everyone was working from home. This led to a sudden spurt in the demand of multiple devices. Today all these devices are powered by some chip or the other. Smart Homes are becoming more popular. They will be powered by home devices like Amazon Alexa and Google Home, which can power further smart appliances. As a result, the home has become one chip guzzling unit. The semiconductor factories cannot cater to this Covid spike.

Other tragedies have further muddied the waters. This year we have had fires in the plants of Samsung (Korea), SK Hynix (China) and Renesas (Japan). SMIC (Semiconductor Manufacturing International Corporation) is China’s largest chip maker. The US government placed restrictions on them in 2020.