The Impact of the Computer Chip Supply Shortage

ABSTRACT

The goal of this research is to explore solutions to recent shortages in the computer chip supply chain. The COVID-19 pandemic revealed weakness in the supply chain for computer chips. With more industries needing computer chips for their products, particularly the automotive industry, a shortage caused by shutdowns in China after the pandemic led to a rise in prices of consumer goods. In this research, we focus on the technicalities of the computer chip supply chain to find methods of preventing shortages and improving the overall supply chain to avoid future shortages. This is particularly important with the increased dependence on computer chips in products. India has shown success with its government incentives to encourage reshoring of computer chip manufacturing, so there is less dependence on other countries to obtain chips. It is recommended that the US follow India’s lead and encourage reshoring of computer chip manufacturing to reduce the likelihood of shortages in the future. © IEOM Society International.