How are industry leaders working to solve the global chip shortage?

TYLER, Texas (KLTV) - A global shortage of semiconductors or, computer chips has been worsening over the past year. These chips are considered the brain of almost every modern device you have in your home.

Since the pandemic began, the demand for tech goods and hi-tech gadgets skyrocketed as we changed our habits and the way we live around them. Dr. Mukul Shirvaikar, a professor in Electrical Engineering, explained shift in demand is one of the reasons behind a worldwide shortage.

“Chips go in everything nowadays, almost every product, so the global demand for chips is going up and up and up. Currently it’s probably the highest it’s ever been,” said Dr. Shirvaikar.

Throughout the pandemic , the number of chips ordered for manufacturing went down because many semiconductor fabrication plants, or “fabs”, closed.

“There are several factors involved,” said Dr. Shirvaikar. “It’s kind of a perfect storm.”

The United States imports a majority of its chips from Taiwan -- the world’s largest chipmaker.

“There was some friction there and chips were not flowing freely between the two nations,” he said.

The trade war between the u-s and china is only the beginning of what’s impacting chip distribution. Manufacturing chips requires a lot of water, and Taiwan is facing its most serious drought in nearly half a century. Another setback came just over two weeks ago when a fire destroyed a giant auto-chip plant in japan.

“And to top it all off we had this cold spell,” he said.

The freeze in February forced major Texas plants to shut down -- forcing the leading chip producer in the U.S. to temporarily halt production.

“The concern right now is, of course, for a lot of industries that their production is shutting down because of dependence on these chips,” said Dr. Shirvaikar.

The United States is slowly constructing new fabs to increase American-made chips and to decrease the reliance on international manufacturing. Two new fabs are in the works in Arizona and even the Lone Star state is expanding the industry with Austin being considered as another location.

Creating these manufacturing plants can cost billions of dollars and take at least a year to get production going. Dr. Shirvaikar said ramping up American-made chips isn’t a quick solution, it’s one that U.S. industry leaders are looking into.

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