19th May 2021 2:28 pm 19th May 2021 2:38 pm Semiconductor shortages can be avoided in a four-pronged approach that incorporates resilience, divestment, diversity in production and flexibility, says Simon Beresford-Wylie, CEO, Imagination Technologies. What initially looked like a blip in chip production is now looking like a long(ish)-term supply crunch. The shortages – which have hit production of everything from home appliances to PCs and automobiles – are now expected to last years rather than months. Market forces will solve this crisis, but there are steps governments, businesses and the wider industry can take to ensure we are better prepared next time. Inevitably the trigger was the Covid-19 pandemic. Semiconductor supply chains were initially disrupted by forced plant closures to stem the spread of the virus. On the demand side an increased need for chips was driven by greater purchases of electronic devices in response to lockdown measures across the world, while demand for cars rebounded faster than expected. With production schedules set well ahead of time, chipmakers were simply unable to respond to these sudden fluctuations in supply and demand. Matters have been made worse by trade frictions affecting the semiconductor sector, severe weather forcing the shutdown of chip factories in Texas in February, the outbreak of a fire at the Renesas factory in Japan in March and the Suez Canal blockage in April.