Semiconductor shortages have been one of the big economic themes emerging in 2021, in our ‘light at the end of the tunnel’ pandemic stage. We have to mention the pandemic because that’s a proximate cause of many of the shortages and supply chain issues that have beset the semiconductor industry and many others. The Auto industry has been a headliner for having to shut production due to lack of semis. And with some grumbling between China and the US over Taiwan, the key role that island plays in the supply chain also looks like a vulnerability.
On today’s episode, we attempt to navigate the economic, geopolitical, and investing implications of all this talk, while zeroing in on the supply chain and its oligopolistic, specialized nature.
Topics Covered
2:30 minute mark – The shortage and Covid dynamics in semis
7:15 – Working through the supply chain itself
16:45 – The consolidation and specialization along the chain
20:30 – Distinguishing the auto industry’s demand needs, and the illustration of supply chain limits (or not?)
28:00 – The role of the hyperscalers and what would happen if we built fabs in the US
34:00 – TSM’s freezing effect on the China-Taiwan-U.S. relationships
37:00 – Don’t forget the pandemic effects
41:30 – China’s successes in the chip supply chain
44:30 – The U.S.’s limits as a consumer market
46:30 – Semiconductor market outlook in light of all of this
56:00 – Last political notes for context

 

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