Published on 14 Oct 2021 on Zacks via Yahoo Finance

ETFs to Gain/Lose on Chip Crunch

The COVID-19 pandemic and the resultant work-learn-shop-from-home culture boosted the need for the already in-vogue digitization, accelerating the demand for various products and devices dependent on chips for their functioning. Demand for PCs, smart phones, gaming hardware and consoles increased.

Then there is demand rooting from the electric vehicle and telecom industry. The automotive sector has specifically advanced to include more electronic components in vehicles that rely on chips. Robust recovery in smartphone sales is spurring demand for semiconductors.

Supply chain issues due to the pandemic and lack of investment in chip building capacities amid surging demand causing chip shortages. Dampened by semiconductor shortages, the global smartphone shipments are expected to expand by 6% annually to 1.41 billion units in 2021, down from the earlier forecast of 9% annual growth and 1.45 billion shipments, according to Counterpoint Research's revised estimates.