Global Chip Shortage and Its Impact on the Electronics Industry

As the coronavirus spread around the world, the electronics supply chain suffered from severe component shortages. While the global economy is recovering, the aftershocks of the pandemic continue to affect businesses significantly.

The global shortage of semiconductor chips has been steadily worsening since last year and is now reaching a crisis point.

According to the Semiconductor Industry Association, global semiconductor sales increased by 6.5% in 2020, demonstrating rapidly growing demand from automakers and tech giants.
There is now a new level of demand that cannot be met fast enough.

Although production has returned to normal, new surges in demand—driven by changing consumer habits—have emerged. Booming sales of home computers, TVs, new gaming consoles, and 5G smartphones have all driven demand for semiconductors.

Chips Are Everything in Modern Electronics

Semiconductors are the brains behind every electronic device, enabling advanced technologies in healthcare, communications, computing, and transportation.
They connect every corner of our lives.

In the automotive sector, chips have made cars smarter, safer, and more efficient. They are essential for systems such as brakes, power steering, and infotainment.

However, as demand for electronics booms, competition between automakers and tech giants has intensified—further worsening the global shortage of semiconductor chips.

In the automotive industry, this shortage has disrupted production and delayed vehicle deliveries.
Automakers are projected to lose billions of dollars this year due to this crisis.

Last to the Party: The Auto Industry Hit the Hardest

Car manufacturers, who reduced chip orders when vehicle sales fell during the pandemic, found themselves at the back of the queue when they tried to reorder as demand rebounded.

According to CNBC, automakers are scrambling to get supplies of chips, which have extremely long lead times due to their complexity.

To put it in perspective:
If Apple spends $56 billion a year on chips and the entire global automotive industry buys only about $37 billion worth, it’s easy to see who gets priority.

There is now a serious imbalance in who receives the limited chip supply first.

OneTech’s Supply Chain Resiliency Program

With over 24 years of expertise in Electronics Manufacturing Services (EMS) and the trust of our partners, OneTech Group has been able to offer alternatives and new solutions to customers during this crisis.Ensuring that our customers’ businesses stay on track is essential.
The flexibility and proactivity of our teams have ensured the continuity and reliability of our supply chain.

At OneTech Group, our mission is to support our customers, help them navigate supply challenges, and maintain operational continuity through people and process excellence.

The semiconductor shortage can be managed—and even turned into an opportunity—by building a flexible workforce, a reliable supplier network, and maintaining strong customer collaboration.

“Act now, think later. Better to discuss material over cost than to discuss line stop.”
— Haithem Daas, Electronics Purchasing Manager, OneTech Group

Building a Resilient Supply Chain

The COVID-19 pandemic required major supply chain adjustments.
As part of our strategic response, we developed a Supply Chain Resilience Program focusing on disruption management and risk reduction.

Key Actions Taken:

• Strengthened and doubled our supply chain workforce
• Deepened relationships with trusted partners
• Revised sourcing partnerships and approved vendor lists
• Expanded our network of providers and research efforts
• Enhanced supplier evaluation and onboarding
• Optimized internal processes to reduce recovery times
• Identified new international shipping options quickly

Lead times for high-end semiconductors—normally around 18 weeks—have doubled to 36 weeks or more.
Waiting passively for production to resume is not an option if we want to keep our SOPs on schedule.

Our teams have offered BOM alternatives based on component availability and lead times, as some electronic parts remain scarce.
Full re-design options have also been proposed to clients through our R&D department.

Additionally, we are developing capabilities to predict supply chain shifts and respond proactively.
We continuously monitor lead times of multiple components to gain visibility and adapt quickly.

Final Thought

If there’s one thing to remember, it’s that supply chains are volatile — but still manageable.
You just need the right EMS partner.