F OR WANT of a chip, the factory was lost. On May 18th Toyota became the latest carmaker forced to cut production amid a global shortage of microchips

Loading, please wait The global chip shortage is here for some time

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2021-05-23 22:00:06

F OR WANT of a chip, the factory was lost. On May 18th Toyota became the latest carmaker forced to cut production amid a global shortage of microchips, announcing it would suspend work at two of its plants in Japan. Firms including Ford, General Motors and Jaguar Land Rover have also had to send workers home.

The pain is not confined to the car industry, for the shortage spans all sorts of chips, from the expensive, high-tech devices that power smartphones and data centres to the simple sensors and microcontrollers that have become a vital commodity, scattered across everything from cars to washing machines, and often costing just a few cents each. In the past few weeks companies including Foxconn, Nintendo and Samsung have warned of hits to production, affecting everything from smartphones and games consoles to televisions and home broadband routers.

Governments are worried. America’s called a summit in April; another is due on May 20th. Germany’s finance minister has written to the government of Taiwan, where many chipmakers are based, lobbying for priority for carmakers. A report from Gavekal Research, a consultancy, published on May 4th, said the shortage might soon hit export performance in several East Asian economies. But there is little that ministers can do. The chip drought is the result of the covid-19 pandemic interacting with an industry that is notoriously prone to cycles of boom and bust. It is likely to persist for months, if not years.

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