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LED Lights Industry Is Being Hit by the Global Chip Shortage

The ongoing global chip shortage has roiled the automotive and consumer technology industries (Consumer technology, or consumer tech, refers to any form of technology that is intended for use by consumers in the general public, as opposed to technology created for governmental, military or commercial use. Consumer tech comes in a variety of different forms and offers a wide range of technological capabilities, encompassing many of the most commonly seen items that people utilize daily) for months, LED lights is being hit also. But the ripple effects of the crisis, which could last into 2022.

LED Lights Industry Is Being Hit by the Global Chip Shortage2

According to an analysis by Goldman Sachs (GS), the semiconductor shortage touches a mind-blowing 169 industries in some way. We’re talking everything from steel product and ready-mix concrete manufacturing to industries that build air conditioning systems and refrigerators to breweries. Even soap manufacturing is impacted by the chip crisis. Quite apart from the led lights industry.

The graphic below breaks down the various industries that are dealing with the shortage.
And I singled out the lighting fixture and lamp bulb for your reference.

To determine which industries were hit by the shortage, Goldman Sachs looked at each industry's need for microchips and related components as a share of their GDP. Industries that spend more than 1% of their GDP on chips, the firm says, will be impacted by the semiconductor shortfall.

For reference, in the automotive sector, 4.7% of industry GDP is spent on microchips and related semiconductors, on this basis, according to Goldman.

When the pandemic began and spread, there is a phenomenon, automakers, figuring consumers would slow down auto purchases, cut down on their supplies of semiconductors used in everything from their vehicles’ infotainment systems to high-end driver-assistance technologies, more semiconductors used in consumer technology goods, such as laptops, tablets, game consoles, mobile phones, etc because to adjust to the pandemic induced work-from-home and remote learning environments.

Once the automakers realized they needed more chips than they thought, the chip makers were already dedicating time to making chips for consumer tech companies. Now both industries are struggling for support from the limited number of global semiconductor manufacturers that can meet their needs.

In this case, it is worse for the LED lighting industry. First of all, LED chip profits are low. Manufacturers who initially produced LED chips have begun to slowly shift their production capacity to produce high-value chips. Secondly, even if they do not transfer their own capabilities, under the current circumstances, LED chip manufacturers cannot obtain enough wafer semiconductors, and most of the wafer semiconductors flow to those high-value chip manufacturers. Third, for the few chips, chip manufacturers will first meet the needs of the LED industry giants. This is why a number of small factories in China have stopped taking orders.

LED Lights Industry Is Being Hit by the Global Chip Shortage5

Led chip shortage, raw material price continues rising, the entire supply chain is in short supply and delay in delivery, but the demand for led lights continues to rise, the biggest stress ever.
Every day, all the led lights manufacturers are asking, WHAT? WHY? AND WHAT IS THE NEXT?

The chip crisis is still far from over, even though, as industry leaders and politicians work to ease the strain on manufacturers across the country, consumer goods will still cost more as a result.

All in all, if you’re in need of a car or some kind of laptop or other pieces of consumer tech, or a led lighting fixture, now is the time to buy — if you can find them.

Post time: May-10-2021

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