A partnership between Europe and the USA could signal the end of the chip shortage that has impacted manufacturing for over a year.
The coronavirus pandemic exposed weaknesses in the supply chain of chip manufacturing, resulting in a global shortage of consumer electronics (with games consoles being among the highest profile casualties) and a slowdown in the production of new cars.
The issue is thought to have arisen from a huge surge in the number of devices being purchased during lockdown, which created a semiconductor shortage that’s still being felt more than a year later.
Now, a partnership between Europe and the USA has been agreed upon to not just make the supply chain more resilient to future issues, but also try to decentralise operations away from China.
The so-called Trade and Technology Council (TTC) will set common manufacturing standards, whilst also setting up specialist working groups dedicated to AI, the internet of things, green technology, data governance and IT security.
The ambition for Europe is to double its global market share for chip manufacturing, from 10 to 20%. To achieve this, it has pledged to invest over £100 billion into the efforts. The USA, meanwhile, has promised a further £37 billion for its own domestic manufacturing.
The TTC doesn’t just want to fill the gaps from the ongoing chip shortage, but use the partnership to develop brand new technologies. A statement published on whitehouse.gov asserted the group would look “to design and produce the most powerful and resource efficient semiconductors.”
If successful, the venture is expected to be welcomed by consumers and tech companies alike across the western world, especially after IBM president Jim Whitehurst claimed last month that the current chip shortage could go on for two more years yet.
He explained to the BBC how lag times from a plant being built and semiconductors coming out would make it a couple of years “before we get enough incremental capacity online to alleviate all aspects of the chip shortage.”
