• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Despite having a $165 million net worth, Scarlett Johansson says work-life balance doesn’t exist—and the first step to success is admitting that

2

Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI

3

The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises

1

Despite having a $165 million net worth, Scarlett Johansson says work-life balance doesn’t exist—and the first step to success is admitting that

2

Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI

3

The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
TechGeneral Motors

The great chip shortage of 2021: Why carmakers and computermakers are scrambling

By
Aaron Pressman
Aaron Pressman
Down Arrow Button Icon
By
Aaron Pressman
Aaron Pressman
Down Arrow Button Icon
February 15, 2021, 10:00 AM ET

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.

The Biden administration, already dealing with a variety of crises, is having to deal with yet another: a chip shortage that has slowed the production of everything from cars to laptops.

Fearful of the impact on jobs and an already slow economy, the White House on Feb. 11 announced plans to help alleviate the problem. But the effort is unlikely to lift chip production anytime soon.

Here’s what’s happening.

Which industries have been affected by the chip shortage?

The auto industry, which uses dozens of chips in every vehicle it produces to control everything from antilock braking systems to infotainment screens, has been the poster child for the shortage. General Motors, for example, said it would close three big factories and reduce production at some others through at least mid-March because of a lack of chips. Ford, Honda, Fiat Chrysler, and Volkswagen have also been hit. “This is an industry-wide issue,” GM CEO Mary Barra said during a recent call with analysts. “We do have mitigation strategies.”

Additionally, Sony says the shortage has hampered its production of new PlayStation 5 gaming consoles, while Nvidia and Advanced Micro Devices blamed a slowdown in graphics card production on the problem.

Meanwhile, Apple and Qualcomm said even more mobile phones could have been sold if they had greater supply.

What’s causing the shortage?

After a few years of tepid demand for most tech gear, the COVID-19 pandemic unexpectedly spurred a huge tech buying spree. Manufacturers of personal computers, laptops, and tablets­—all of which require chips for processing, graphics, and other functions—were caught off guard.

Last year, computer sales exceeded 302 million units, a 13% increase from the year before, and the most since 2014, according to market tracker International Data Corp. At the same time, webcam sales rose almost 360%, a consequence of people working from home wanting to use video conferencing.

Have trade restrictions impacted chip supplies?

Another cause of the shortage is the former Trump administration’s trade battle with China. The war caused many customers to avoid chips from Semiconductor Manufacturing International, or SMIC, a Chinese chip manufacturer that accounts for about 5% of global semiconductor supply, and about 10% of chips that are made with older technology.

In a decision announced last fall, the U.S. Commerce Department declared that SMIC may supply the Chinese military with chips, making it a threat to national security. In December, the federal government restricted SMIC from obtaining some U.S.-regulated chip-making equipment. Buyers cut back orders from SMIC.

Can’t other chipmakers build more factories?

They can—but not easily or quickly. Many companies thought of as chipmakers, including Apple, Qualcomm, and Nvidia, design chips but don’t actually manufacture them. Chip making has become an increasingly consolidated industry because a new chip fabrication factory can cost $10 billion or more. This year, only three companies are manufacturing chips using the most cutting-edge technology: Samsung, Taiwan Semiconductor, and Intel. In February, Samsung filed to build a new $17 billion factory near Austin, Tex., that won’t produce chips for sale for almost three years.

What can the White House do to help alleviate the problem?

President Biden’s plan to sign an executive order addressing the chip shortage lacks details. Furthermore, from the limited information released, it’s clear that the plan will take time to have much impact.

“The review will be focused on identifying the immediate actions we can take, from improving the physical production of those items in the U.S. to working with allies to develop a coordinated response to the weaknesses and bottlenecks that are hurting American workers,” spokeswoman Jen Psaki said.

Lawmakers and some chip companies have been seeking government funds to subsidize building more U.S. manufacturing capacity, but any increased production could take years.

About the Author
By Aaron Pressman
See full bioRight Arrow Button Icon

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Tech

SpaceX heads into a record-shattering IPO with the ‘deepest moat that exists today’ as investors vow to ‘never bet against Elon’
InnovationIPOs
SpaceX heads into a record-shattering IPO with the ‘deepest moat that exists today’ as investors vow to ‘never bet against Elon’
By Jason MaMay 16, 2026
4 hours ago
tarot
AICulture
We talked to 12 tarot card readers who are using AI. They split in 2 camps, with big implications for the technology
By Ziv Epstein, Farnaz Jahanbakhsh, Vana Goblot and The ConversationMay 16, 2026
6 hours ago
liberman
Commentarystart-ups
We watched social media concentrate. The same thing is happening in AI, only at a deeper layer
By David Liberman and Daniil LibermanMay 16, 2026
8 hours ago
mustafa suleyman
AIMicrosoft
Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
By Jake AngeloMay 16, 2026
9 hours ago
olivier
CommentaryAnthropic
I’ve been studying Big Tech for a long time. What just happened with Anthropic and the Pentagon terrifies me
By Olivier SylvainMay 16, 2026
9 hours ago
bhaskar
Economydisruption
The prophet of the ‘Wired Belt’ says capitalism is finally eating itself
By Bhaskar ChakravortiMay 16, 2026
11 hours ago

Most Popular

Despite having a $165 million net worth, Scarlett Johansson says work-life balance doesn’t exist—and the first step to success is admitting that
Success
Despite having a $165 million net worth, Scarlett Johansson says work-life balance doesn’t exist—and the first step to success is admitting that
By Preston ForeMay 13, 2026
3 days ago
Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
AI
Microsoft AI chief gives it 18 months—for all white-collar work to be automated by AI
By Jake AngeloMay 16, 2026
9 hours ago
The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
Politics
The Bezos family just donated $100 million to help achieve one of Mayor Zohran Mamdani’s top campaign promises
By Jake AngeloMay 12, 2026
4 days ago
Current price of oil as of May 15, 2026
Personal Finance
Current price of oil as of May 15, 2026
By Joseph HostetlerMay 15, 2026
1 day ago
Meet the 20-year-old CEO who launched a company in high school to solve Gen Z's entry-level job crisis
Future of Work
Meet the 20-year-old CEO who launched a company in high school to solve Gen Z's entry-level job crisis
By Jake AngeloMay 16, 2026
12 hours ago
‘You’re not a hero, you’re a liability’: Shark Tank’s Kevin O’Leary warns Gen Z founders to stop glorifying hustle culture
Future of Work
‘You’re not a hero, you’re a liability’: Shark Tank’s Kevin O’Leary warns Gen Z founders to stop glorifying hustle culture
By Jacqueline MunisMay 16, 2026
9 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.