Intel Warns Chip Supply Shortages to Last Years

Intel announced that it could be several years before a reversal in the global shortage of semiconductors occurs. This issue has caused numerous problems for multiple industries, ranging from shuttering automotive production lines to making consumer electronics impossible to find.

The work-from-home cycle that started with the COVID-19 lockdowns in 2020 worsened the existing situation where the industry was drawing down inventory to create on-demand orders. It became a perfect storm of mitigating factors that put tremendous strain on the global supply chain.

Although Intel notes the industry has taken steps to address the near-term constraints of these shortages, the company expects that it will take at least two years before supplies reach a measure of normalcy again.

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How the Chip Shortage Problem Gets Solved

Intel plans to expand to multiple American and European locations to start producing semiconductors in several new areas. The thinking behind this $20 billion investment is that supply chain diversification will work to pick up the losses that might occur in other global spots.

Two companies, one in Taiwan and the other in South Korea, have dominated this industry. About 70% of the chips get manufactured in Asia, which has been increasing over the past two decades.

Intel also plans to expand its advanced manufacturing capacity, building two factories in Arizona to manage its most complex chips.

The goal is to get the automotive industry fully operational by the end of 2021. After that, the other shortages will also get addressed.

Oil States Could Lose $13 Trillion by 2040

When Joe Biden was debating Donald Trump in the run-up to the 2020 Presidential election, one of the issues he brought up was a shift to a greener economy.

By using more renewable energy resources, it could be possible to cut down on the quantity of greenhouse gases getting produced each day.

Although that shift to eco-friendly power might help the environment, it could cause some countries to lose an average of 40% of their revenues. The collective losses from such an event could total $13 trillion by 2040.

That’s why nations like Saudi Arabia and the United Arab Emirates are looking for ways to diversify their economies instead of looking at oil alone.

How Dependent Are Come Countries on Oil?

Although the median losses might total 40% by switching to environmentally friendly power resources, the problem is far greater in some parts of the world.

The financial dependence on oil for Iraq could cause it to lose up to 80% of its annual revenues. That’s about the same amount that Equatorial Guinea would have start disappearing.

Another seven countries, including Saudi Arabia, would lose more than 60% of their incoming resources.

The countries with the lowest production costs would be the only ones spared as they’d be the primary suppliers of the petroleum hydrocarbons that get used for numerous products.

How Fast Can These Countries Diversify?

When looking at the revenues of the oil-producing nations in 2021, the countries that stand to lose the most during a switch to green energy are also among the poorest ones out there. That’s why income diversification is a crucial task to complete.

Each country will need to take individualized steps to offset this issue. There must be improvements to government quality, more investment in education, and business climate changes to encourage development.

The rest of the world should support this transition. Even if we excuse the moral argument, a stronger global economy helps everyone find ways to chase their dreams.