The Global Chip Industry Has a Monopoly Problem

And it’s just getting worse

Photo by Nathan Cima on Unsplash

A global pandemic made 2020 the year of staying at home.

We upgraded our computers, phones, and televisions. We bought headphones and gaming consoles. And because we were eating out less, we bought better home appliances: a new stove, a fridge that could talk.

The strong demand for electronics meant unprecedented revenues for some of the world’s largest electronics manufacturers.

In 2021, LG Electronics posted record sales of over seventy trillion Korean won. Then it posted record sales — again — the following year, with revenues surpassing eighty trillion Korean won.

But at the same time as tech companies were gloating to shareholders, cracks were beginning to emerge in other parts of the value chain.

And cracks were all they were–initially: a little unfilled inventory here, some order delays there.

But then the cracks grew. And then they weren’t cracks anymore but canyons.

What had started as just a little unfilled inventory became a global challenge for consumers to obtain anything that relied on computer chips. This shortage in chips made electronics pricier at a time when voters were already upset about high inflation.