Many manufacturers across many industries are faced with an unprecedented global shortage of tech parts such as semiconductors and sensors. The Covid-19 pandemic, the higher demand than supply and the more recent political sanctions have all contributed to these shortages that impacted among others the automobile industry, game console manufacturers and the almighty – seemingly unstoppable – smartphone manufacturers. What are the implications of these global chip shortages?
During the Covid-19 pandemic many production line workers had to stay home due to lockdowns and were unavailable sometimes for several months. By the time lockdowns were lifted, the rising demand for consumer and business electronics disrupted the supply chain. Up until recently, the numbers of returning employees was limited due to social distancing restrictions that did not allow production lines to work at full capacity.
Before the events took place in Ukraine, the US Commerce Department had published a semiconductor supply chain report that projected the worldwide chip shortage to last until the end of 2022, and possibly even extend into 2023.
More recently, the beginning of the geopolitical conflict between Russia and Ukraine seems likely to add to the chip shortage woes. Palladium and neon are two key resources for the production of semiconductors. According to a Moody’s Analytics estimate, Russia supplies approximately 40 per cent of the world’s supply of palladium and Ukraine produces about 70 per cent of the world supply of neon. Thus, these chip shortages are expected to worsen if the conflict drags on for a long period of time.

Palladium Prices – source: macrotrends.net