The semiconductor industry’s global economic significance was well appreciated before the recent Covid-19 crisis. Yet events through the past few quarters have highlighted the industry’s macro importance. And a chip shortage for key consuming sectors now constrains the global recovery, especially for the auto sector.
There is a growing recognition that the shortage will not end quickly. We will see protracted adjustments along several dimensions (price, production, trade, and capital spending), and these will be powerful enough to have sustained macro and sector-specific effects.
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