Chip shortage may persist

Global chip shortage that hit car production and other industries using sensors would continue in 2022 but is unlikely to be as bad as last year, Moody’s Analytics has said. With majority of the people vaccinated in Malaysia, Vietnam, Taiwan, Korea and Japan - key countries in the semiconductor supply chain - chip manufacturing is expected to be less impacted even as Omicron cases surge.

Now, more than half of the population is vaccinated in these countries, and production is unlikely to be stymied the same way that it was during the mid-2021 Delta wave, the global research firm noted.

As demand for chips grow, the semiconductor producers have decided to ramp up their capacities. Moreover, governments world over have been working on plans to create domestic capacity for chip manufacturing. India has already put in place an incentive scheme to promote chip manufacturing in the country.