Semiconductor Shortage comes with a Silver Lining

The global Semiconductor deficit has yet to be overcome by manufacturers. Gaming consoles such as the PlayStation 5 are still in short supply, automakers are shipping automobiles with missing features, and Apple could produce 10 million fewer iPhones in 2021. However, these supply chain difficulties may yield an unexpected positive for select companies. Manufacturing delays in other countries, combined with a never-ending demand for consumer electronics, have resulted in a bonanza for some American chipmakers.

Even lesser-known American businesses with aging or used equipment have seen a boom in demand for legacy chips or microcontrollers. These parts are inexpensive to produce yet are a vital component for many gadgets. As larger businesses that focus on more advanced technologies have had supply chain issues, demand for the more basic chips has surged. As a result, companies that build these microcontrollers are now on a spending binge to increase their entire manufacturing capacity, as they are flooded with orders.

According to the New York Times, one Arizona-based Semiconductor supplier, Microchip Technology, invests in expensive new equipment and expands its workforce because its profits tripled last quarter. In addition, GlobalFoundries, a chipmaker based in Malta, New York, stated in July that it would expand its production capabilities by building another chip plant nearby. And only last month, a North Carolina firm, Cree, announced its shift to Semiconductor and changed its name to Wolfspeed. In addition, the company is constructing a new production facility in upstate New York.

Another strong indicator that the chip supply constraint favors certain US suppliers and gives up access to new customers is that GM has already signed up as a strategic customer. These achievements, taken together, hint at a trend that industry officials hope will lead to a revival in American chip manufacture.