Understanding the global chip shortages
I was on a panel with one of the study's authors recently, she's very thoughtful, thorough, and precise. I like how she emphasized that there is no simple TL;DR to explain the situation, and her paper does a good job of covering a lot of ground without taking short cuts.However, one factor not mentioned in the study is that China, which had announced a plan for foundry independence, had its capacity expansion program disrupted by the trade war, as the US restricted China's ability to acquire key equipment to build out fabs.As a result China could not build the plants it needed to meet its own consumption, forcing them to buy chips from the same vendors that everyone else is also trying to buy chips from. This is an additional shock which is hard to estimate in magnitude but it's probably not small as it represents the missing capacity of entire fabs for many months or years as they struggle to be built.Thus while the US trade policy may have effectively hamstrung China's plans for foundry independence in the short term, it may also have contributed to a global shortage of semiconductors and its own inflation problems as collateral damage. Trade wars are tricky: without careful and long term policy planning there is a high risk of even more collateral damage.Another factor that could also be contributing specifically to the difficulties of the automotive supply chain is that China internally had made electric vehicles a strategic technology focus, which means that domestically China's demand for automotive-grade semiconductors was set to surge. Even before the pandemic I was getting tips from buyers that power semiconductors, particularly those in SiC and GaN, were going to be in short supply, due to that shift.edit - emphasized original paper