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Companies Are Hacking Their Way Around the Chip Shortage

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The crisis has highlighted how crucial semiconductors are to the economy and has shown how brittle many supply chains are. Industries that have been badly affected include consumer electronics, LED and other lighting, energy, and automotive.

Credit: Joseph Lago/Getty Images

McKinsey has tapped into the sense of urgency by creating a team dedicated to sourcing chips for the companies it consults for. Wiseman says the team will look beyond regular supply chains and has found much-needed chips in countries including Morocco, the Netherlands, and Japan. They have also been able to identify chips that may be slightly different from the ones originally called for. Manufacturers and brokers are, of course, able to charge a premium, and companies have little choice but to pay. "The chips actually are out there," Wiseman says. "It's just a question of finding and getting them."

In some cases, this means taking desperate measures. Last month, Peter Wennink, CEO of the Dutch company ASML, which makes the complex machines needed to mint cutting-edge computer chips, revealed another eye-opening example. Wennink says one large industrial conglomerate had resorted to buying washing machines just to scavenge the chips inside them for its products.

The chip shortage was caused by several factors, including a rush to buy electronics needed to work from home in the pandemic, a hoarding of chips sparked by trade tensions between the U.S. and China, and disruption to flow of components through a complex semiconductor supply chain distributed around the globe.

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