The Global Chip Shortage: How to play it out in the Emerging Markets

Synopsis: The world is witnessing an unprecedented chip shortage that has forced many global car makers to temporarily halt their operations, delayed launch of Apple’s products, cancelled release of Samsung’s highly anticipated Galaxy Note smartphone and even made Sony’s PlayStation 5 a hard bet to catch. How did we get here? When Covid-19 hit the world, automakers, apprehensive of low demand, cut their chip orders. While the auto sales dwindled, the Smartphone, PC and consumer electronic industry saw a sharp rise in demand as people started buying more gadgets while they remained locked in their homes. As the months rolled on and lockdowns were lifted, the demand for cars rose sharper than the auto makers had anticipated. This huge demand but lack of supply has what caused this global chip shortage that we are witnessing today. EMAlpha took a deep dive into the prevailing scenario to find if there are any opportunities for investors to make the most out of this scenario. And sure enough, there indeed is. We found two companies that stand to gain handsomely courtesy the huge demand that has arose in semiconductors around the globe. They are Taiwan’s TSMC and South Korea’s SK Hynix. EMAlpha, utilising its AI and proprietary algorithm tries to figure out what their future prospects could be.

The Covid-19 Induced Global Chip Shortage

When Covid-19 hit the world in early 2020, a pall of gloom hung over the global economy and uncertainty ruled the day. The future was pretty much unchartered and countries and companies around the globe started swinging in the dark. The current chip shortage is the result of the unexpected ways in which the global industries’ demand has played out for the chips.

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