How shortages of a $1 chip sparked a crisis in the global economy

biometrics

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To understand why the US$450-billion semiconductor industry has lurched into crisis, a helpful place to start is a US$1 (R15) part called a display driver.

Hundreds of different kinds of chips make up the global silicon industry, with the flashiest ones from Qualcomm and Intel going for $100 to more than $1 000 apiece. Those run powerful computers or the shiny smartphone in your pocket. A display driver is mundane by contrast: Its sole purpose is to convey basic instructions for illuminating the screen on your phone, monitor or navigation system.

The trouble for the chip industry — and increasingly companies beyond tech, like car manufacturers — is that there aren’t enough display drivers to go around. Firms that make them can’t keep up with surging demand, so prices are spiking. That’s contributing to short supplies and increasing costs for LCD panels, essential components for making televisions and laptops, as well as cars, aeroplanes and high-end refrigerators.

 
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