Chip Shortage UpdateChip Shortage Update

The global chip shortage is continuing to hamper enterprises worldwide, ranging from vehicle manufacturers to mobile phone makers, as well as other consumer, business, and industrial producers. Detrimental climate conditions are now contributing to a struggling supply chain that has already weathered its share of pandemics, military actions, and economic turmoil.

The global chip shortage issue is complex, with multiple dimensions, says Elias Eliadis, senior director, strategy and transactions, with business consulting services provider EY. "Most industry experts would agree that climate change has an effect on chip production, as it requires a highly controlled manufacturing environment, a reliable supply of ultrapure water (UPW), and stable environmental conditions, such as temperature and humidity."

Climate conditions can affect chip production and distribution in multiple ways. "Water quality issues, or shortages, can impact manufacturing yields and disrupt factory operations," Eliadis says. Cold weather can cause power supply outages or delay the transportation of raw materials and finished goods. "Floods can cause fab shutdowns [with] an extended impact on production output," he adds.

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