• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup

2

Markets tumble worldwide as Fed resets expectations: $400 billion wiped off SpaceX stock

3

Current price of oil as of June 23, 2026

1

After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup

2

Markets tumble worldwide as Fed resets expectations: $400 billion wiped off SpaceX stock

3

Current price of oil as of June 23, 2026
TechGeneral Motors

The great chip shortage of 2021: Why carmakers and computermakers are scrambling

By
Aaron Pressman
Aaron Pressman
Down Arrow Button Icon
By
Aaron Pressman
Aaron Pressman
Down Arrow Button Icon
February 15, 2021, 10:00 AM ET
Add Fortune on Google for similar content.

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.

The Biden administration, already dealing with a variety of crises, is having to deal with yet another: a chip shortage that has slowed the production of everything from cars to laptops.

Fearful of the impact on jobs and an already slow economy, the White House on Feb. 11 announced plans to help alleviate the problem. But the effort is unlikely to lift chip production anytime soon.

Here’s what’s happening.

Which industries have been affected by the chip shortage?

The auto industry, which uses dozens of chips in every vehicle it produces to control everything from antilock braking systems to infotainment screens, has been the poster child for the shortage. General Motors, for example, said it would close three big factories and reduce production at some others through at least mid-March because of a lack of chips. Ford, Honda, Fiat Chrysler, and Volkswagen have also been hit. “This is an industry-wide issue,” GM CEO Mary Barra said during a recent call with analysts. “We do have mitigation strategies.”

Additionally, Sony says the shortage has hampered its production of new PlayStation 5 gaming consoles, while Nvidia and Advanced Micro Devices blamed a slowdown in graphics card production on the problem.

Meanwhile, Apple and Qualcomm said even more mobile phones could have been sold if they had greater supply.

What’s causing the shortage?

After a few years of tepid demand for most tech gear, the COVID-19 pandemic unexpectedly spurred a huge tech buying spree. Manufacturers of personal computers, laptops, and tablets­—all of which require chips for processing, graphics, and other functions—were caught off guard.

Last year, computer sales exceeded 302 million units, a 13% increase from the year before, and the most since 2014, according to market tracker International Data Corp. At the same time, webcam sales rose almost 360%, a consequence of people working from home wanting to use video conferencing.

Have trade restrictions impacted chip supplies?

Another cause of the shortage is the former Trump administration’s trade battle with China. The war caused many customers to avoid chips from Semiconductor Manufacturing International, or SMIC, a Chinese chip manufacturer that accounts for about 5% of global semiconductor supply, and about 10% of chips that are made with older technology.

In a decision announced last fall, the U.S. Commerce Department declared that SMIC may supply the Chinese military with chips, making it a threat to national security. In December, the federal government restricted SMIC from obtaining some U.S.-regulated chip-making equipment. Buyers cut back orders from SMIC.

Can’t other chipmakers build more factories?

They can—but not easily or quickly. Many companies thought of as chipmakers, including Apple, Qualcomm, and Nvidia, design chips but don’t actually manufacture them. Chip making has become an increasingly consolidated industry because a new chip fabrication factory can cost $10 billion or more. This year, only three companies are manufacturing chips using the most cutting-edge technology: Samsung, Taiwan Semiconductor, and Intel. In February, Samsung filed to build a new $17 billion factory near Austin, Tex., that won’t produce chips for sale for almost three years.

What can the White House do to help alleviate the problem?

President Biden’s plan to sign an executive order addressing the chip shortage lacks details. Furthermore, from the limited information released, it’s clear that the plan will take time to have much impact.

“The review will be focused on identifying the immediate actions we can take, from improving the physical production of those items in the U.S. to working with allies to develop a coordinated response to the weaknesses and bottlenecks that are hurting American workers,” spokeswoman Jen Psaki said.

Lawmakers and some chip companies have been seeking government funds to subsidize building more U.S. manufacturing capacity, but any increased production could take years.

About the Author
By Aaron Pressman
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Tech

The founding team at Seltz, a startup trying to reinvent web search for AI agents, pose for a group photo with San Francisco's Golden Gate Bridge in the background.
Startups & VentureVenture Capital
Exclusive: Seltz, a startup rebuilding web search for AI agents, raises $12.5 million in seed funding
By Jeremy KahnJune 24, 2026
30 minutes ago
Sarah Youngwood, EVP and CFO at Nasdaq.
C-SuiteFinance
Inside Nasdaq CFO Sarah Youngwood’s AI playbook
By Sheryl EstradaJune 24, 2026
60 minutes ago
As mega-funds grab 72% of all capital raised, the gap between VC’s haves and have-nots keeps widening
NewslettersTerm Sheet
As mega-funds grab 72% of all capital raised, the gap between VC’s haves and have-nots keeps widening
By Allie GarfinkleJune 24, 2026
2 hours ago
You can ignore Trump’s threats to leave NATO: Pimco says they’re a ‘paper tiger’
EconomyMarkets
You can ignore Trump’s threats to leave NATO: Pimco says they’re a ‘paper tiger’
By Jim EdwardsJune 24, 2026
2 hours ago
Tencent COO and interactive entertainment group president Ren Yuxin on July 9, 2020 in Shanghai, China. (Photo: Wu Jun/VCG/Getty Images)
NewslettersFortune Tech
Tencent winds down its Japanese game studio investments
By Andrew NuscaJune 24, 2026
2 hours ago
rh
AIReid Hoffman
Reid Hoffman says SpaceX is ‘not an AI company’ and xAI is a ‘complete train wreck’—and there’s room for both OpenAI and Anthropic
By Nick LichtenbergJune 24, 2026
2 hours ago

Most Popular

After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
Success
After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
By Orianna Rosa RoyleJune 23, 2026
23 hours ago
Markets tumble worldwide as Fed resets expectations: $400 billion wiped off SpaceX stock
Banking
Markets tumble worldwide as Fed resets expectations: $400 billion wiped off SpaceX stock
By Jim EdwardsJune 23, 2026
1 day ago
Current price of oil as of June 23, 2026
Personal Finance
Current price of oil as of June 23, 2026
By Joseph HostetlerJune 23, 2026
23 hours ago
Meet the 2 men putting New York's $300 billion pension fund in play for the first time in 20 years
Investing
Meet the 2 men putting New York's $300 billion pension fund in play for the first time in 20 years
By Nick LichtenbergJune 22, 2026
2 days ago
Texas and Charlotte used to build huge McMansions—now they're copying the California design tricks they once mocked
Real Estate
Texas and Charlotte used to build huge McMansions—now they're copying the California design tricks they once mocked
By Sydney LakeJune 22, 2026
2 days ago
Former U.S. Secret Service agent says bringing your authentic self to work stifles teamwork: 'You don’t get high performers, you get sloppiness'
Success
Former U.S. Secret Service agent says bringing your authentic self to work stifles teamwork: 'You don’t get high performers, you get sloppiness'
By Sydney LakeJune 21, 2026
3 days ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.