3 Chip Stocks To Watch As The Semiconductor Shortage Worsens

3 Chip Stocks To Watch As The Semiconductor Shortage Worsens

A global shortage in semiconductor chips has been wreaking havoc on the tech sector, automotive industry, consumer electronics industry, and everything in between thanks to massive supply chain snarl ups. The global Covid-induced supply crunch for chips has badly hurt production across a number of industries, ranging from cars to consumer appliances, smartphones and personal computers.

The trade war between the United States and China has only served to make a bad situation worse.

About a year ago, the U.S. Commerce Department declared Chinese chip manufacturer Semiconductor Manufacturing International, or SMIC, persona non grata after determining the company supplies the Chinese military with chips thus making it a threat to national security. The federal government restricted SMIC from obtaining some U.S.-regulated chip-making equipment leading to U.S. buyers cutting back orders from the company. SMIC is one of the largest manufacturers of semiconductor chips, accounting for about 5% of global semiconductor supply. Although the Biden administration recently granted SMIC and Huawei suppliers billions of dollars worth of licenses from November through April that allows them to sell them goods and technology despite their remaining on the U.S. trade blacklist, it remains to be seen if the move will ease the shortages.