Why we’re in the midst of a global semiconductor shortage - Scott Storkamp
We’re amid a global semiconductor shortage. And it’s most likely not going to get any better soon. Some say that we won’t see relief until 2024 or 2025!
What do we know about what’s driving this surge? There are various reasons for it, but one of the most significant is the surging worldwide demand for products that rely on semiconductors to work.
What does a semiconductor shortage mean for people around the world?
It means that your favorite electronic device is going to be more expensive than ever.
Are you a gamer? Your graphics card and processor will cost much, much more. What about your favorite coffee machine at work? You’ll pay extra for every cup of joe!
And if you’re relying on a smartphone or tablet for personal or professional use, don’t be surprised if you have a much harder time finding the right one for your needs.
If you’re in the market for a new vehicle, a semiconductor shortage can impact availability, inventory levels, and the MSRP on new cars.
Since 2010, there has been an 80% increase in semiconductor consumption and demand worldwide.
How does a semiconductor shortage impact manufacturers? The answer to this question is that it significantly impacts the prices of their products. For example, semiconductor shortages have caused a spike in graphic card and chipset costs by up to 15%.
As a wealth management professional, a semiconductor shortage interestingly impacts the stock market. In the past, stocks in companies that are affected by a lack of chips have increased. So if you’re considering investing in semiconductor-reliant stocks such as NVIDIA or Intel, make sure to get your research done before jumping into these trades.
Typically, when demand increases and supply gets limited, prices on products go up. And when you have a semiconductor shortage, prices in the market will be drastically higher than they would be without such a shortage.
Concerning the stock market, a semiconductor shortage may not be a bad thing if you’re investing in semiconductor-reliant stocks. Investors with limited tolerance for risk might consider a semiconductor ETF such as the iShares PHLX Semiconductor ETF.
So while this shortage is not great news for the entire industry, there are still some ways to make money. You must be smart about how you do your research and invest accordingly.
By making strategic contributions in semiconductors today, you can help to leverage the risk and diversify your portfolio. Semiconductor shortages may not be bad for investors because prices and demand will increase, potentially being a great investment opportunity.
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A recognized financial analyst, Scott Storkamp has spent over 30 years in the industry and has gathered a deep knowledge of wealth management. A strategic opportunist, his experience in Military Intelligence with the US Army Special Forces, PhD-level Quant knowledge, advanced coding, and AI modeling expertise have all been great assets in his professional career. Scott utilizes strategy, logic, and risk assessment to evaluate and seize market opportunities as they become available.
