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Because of the dim forecast for COVID-19’s future, automakers cancelled order for chips during the period 1Q20/2Q20. Since this was a “free” time for wafer capacity, IDMs and foundries were soon flooded with consumer electronics company orders as the demands for this product rose. As demand for automotive parts increased faster than expected, car manufacturers rapidly ran out of chips due to their supply chain model that was designed to be just in time that generally seeks to limit inventories. Chip shortages across the globe has only increased due to the current situation.

Manufacturing at both the front and back end depend on thousands of chemicals and materials. A lack of a particular type of chemical might cause a domino effect throughout the entire value chain and may disrupt the entire production process.

The shortage of chips worldwide is a result of many causes. There were instances when Chinese enterprises began stockpiling chips to prevent US relations and international concerns. After the outbreak and led to the shift of working from home, demands for consumer electronics and server equipment increased dramatically. gg388smj5z.