Global Computer Chip Shortage Hurting Consumer Goods Supply

The ongoing worldwide shortage of computer chips is slowing the supply of everything from new coffee machines to electric cars.

Driven by COVID-related supply chain issues in Asia, computer chips are in short supply. This has heavily impacted the roll-out of seasonal consumer goods in the US, especially.

America consumes the most computer chips in the world, but only accounts for 12% of global supply. The country is heavily reliant on Asian economies to produce these crucial items.

Electric cars require as many as 2,000 chips, and items like smartphones, tablets and gaming consoles also rely heavily on them. Already, a global shortage of PlayStation consoles has the gaming community in a panic.

The CEOs of dozens of major companies including Ford, Verizon, Apple and General Motors, have recently appealed to the US Congress to pass urgent measures to stimulate local supply of computer chips.

What does this mean for me?

The humble computer chip is playing a key role in inflation. Take the new vehicle market in the US as an example. Prices of new vehicles rose by 10.6% in October. The lack of new cars is increasing demand for second-hand cars, resulting in a 32% increase in used car prices.   

As a stock trader, it benefits you to understand which company’s share prices will be most affected by blockages in its new product pipeline. As earnings drop due to lack of sales, several consumer brands can anticipate significant moves to their share prices in the short term. As a switched-on investor, you should be ready.