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The global chip shortage is here for some time

Microchips were a boom-and-bust industry even before covid-19

FOR WANT of a chip, the factory was lost. On May 18th Toyota became the latest carmaker forced to cut production amid a global shortage of microchips, announcing it would suspend work at two of its plants in Japan. Firms including Ford, General Motors and Jaguar Land Rover have also had to send workers home.

The pain is not confined to the car industry, for the shortage spans all sorts of chips, from the expensive, high-tech devices that power smartphones and data centres to the simple sensors and microcontrollers that have become a vital commodity, scattered across everything from cars to washing machines, and often costing just a few cents each. In the past few weeks companies including Foxconn, Nintendo and Samsung have warned of hits to production, affecting everything from smartphones and games consoles to televisions and home broadband routers.

Governments are worried. America’s called a summit in April; another is due on May 20th. Germany’s finance minister has written to the government of Taiwan, where many…