Pass the Chips
What are your favorite chips? Utz? Lays? Ruffles? No, not those chips! I’m talking about Intel, NVIDIA, Qualcomm, Micron, Global Foundries, and AMD. Those guys.
Despite what cardiologists say, we need chips!
According to the WSJ, “A global chip shortage is hampering production of everything from home appliances to PCs to autos". At Intel, Chief Executive Pat Gelsinger said the company “would make some capacity available to produce chips in particular short supply and needed by auto-component makers.”
Demand is strong and chips are found almost everywhere now. The article goes on to explain, “On top of a spike in demand, producers have been hamstrung by a series of freak events that have knocked out supply, while ongoing U.S.-China political frictions and concerns of a prolonged shortage have prompted some manufacturers to stockpile chips. This could slow the post-pandemic recovery for certain industries that use the chips that are looking to take advantage of consumer spending.” The story concluded that the shortage “feeds into inflation concerns as higher chip costs can stoke prices throughout the economy.”
Motor vehicles, for example, were 90 percent mechanical and 10 percent electrical as recently as 30 years ago. Today, that equation has flipped. Health care, manufacturing, agriculture, and every other sector of our economy depends on technology. Chips are central to the technologies they rely upon. This shortage will have implications in ways we’ve yet to feel, so this is worth watching.
