The Impact of Chip Shortage on World Trade

Chips, which are used in many fields such as the defense industry, electronic systems, automobiles, home appliances, wearable technologies, smart phones, and computers and are one of the indispensable parts of electronic devices, are also called semiconductors.

The electronic circuits of the chips, which are based on very complex and demanding processes, are positioned on a thin silicon surface. The transistors placed on the chip act as miniature electrical circuits. The more transistors fit into the chips, the faster and more powerful the chip will be. The device that enables these processes to be performed on chips that are 200 times smaller than a blood cell are photolithography machines that can print trillions of transistors per hour on silicon plates. Before entering the machine, each plate is covered with a photosensitive liquid layer. The machine, which works by sending a laser beam on the transistor design and the silicon layer, leaves the image of the transistor on the plate.


Purposes of Chips

Chips are used for two main purposes. Logic chips, which we can describe as the brain of electronic devices, can process information in order to complete the defined tasks. CPUs (Central Processing Units), which are the first developed versions of logic chips, are also called "original chips". In addition, GPU (Graphic Processing Chips) and NPUs (Neural Processing Chips) are also logic chips. Chips used for information storage are called memory chips. There are two types, DRAM (Dynamic Random Access Memory), which is used to run programs, and NAND Flash, which is used to store photos or other data.


Chip Shortage

Due to the quarantines that entered our lives with the Covid-19 pandemic, people had to stay at home. The use of computers, smart phones, tablets and game consoles increased as education and business life started to be carried out from home. In addition to this increase in demand for electronic devices, the increase in infrastructure investments of telecommunication companies caused an intense increase in chip demand.

Due to the decrease in demand in the automotive industry due to the epidemic, automobile manufacturers canceled a significant part of their chip orders. Due to the increase in demand in the consumer electronics sector at this time, chip suppliers also turned their attention to these sectors.

In time, the demand for the automotive industry started to increase again as the epidemic started to lose its power and people started to leave their homes. While this increasing demand was directly reflected in the chip demands, manufacturers in the automotive industry could not replace the chip orders they canceled.

While chip manufacturers were trying to meet the demand of the consumer electronics industry, they had to line up their customers in the automotive industry trying to come back to life. Although the chip manufacturers continued production by increasing their capacities, they could not fully meet the demands.

The fact that the chip supply could not meet the demands deeply affected many sectors such as defense, automotive and communication. This crisis caused the production plans to be interrupted or even stopped in many sectors. For example, world giant Apple had to postpone the launch of its new generation Iphone 12 model phone for two months due to the chip crisis. In automobile production, on the other hand, leaning towards simpler designs such as vehicles without navigation and multimedia has begun.

According to some studies, this chip crisis, which is thought to not end before 2023, seems to continue to affect the economy quite badly. In Turkey, under the leadership of the Ministry of Industry and Technology, ASELSAN and TUBITAK started to work on domestic chip production.


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