The semiconductors shortage has had lasting effects on global electronics manufacturing, logistics and investment strategies. While the most severe disruptions occurred earlier in the decade, supply chain pressures in 2025 continue to shape how businesses source, design and produce critical components. These challenges highlight the need for both operational resilience and skilled technical training across the sector.
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Overview: What the Semiconductors Shortage Was and Why It Mattered
The semiconductors shortage refers to the extended global disruption in chip supply that began in 2020 and peaked between 2020 and 2022. Triggered by surging demand for consumer electronics, automotive chips and cloud infrastructure during the pandemic, it exposed how dependent modern industries had become on a small number of advanced foundries.
Although the general shortage began to ease from late 2023 onwards, bottlenecks remain in 2025, particularly for AI-related chips and advanced packaging technologies. These lingering constraints affect production in areas such as data centres, robotics and edge computing, where supply must match rising performance demands.
The stock market has also felt the impact. In particular, Nvidia emerged as a dominant force during the shortage, with its AI-focused chips benefiting from both demand spikes and limited competition. This dynamic helped push Nvidia to become, briefly, the world’s most valuable company in mid-2025.
Before exploring the causes and impact in more detail, it’s worth noting that training remains a priority for technicians working with PCBs and microelectronic assemblies. A.R.T. is an experienced IPC training provider, offering a full range of programmes to help manufacturers maintain quality under complex production pressures.
Causes of the Semiconductors Shortage
The semiconductors shortage arose from a combination of demand shocks and structural weaknesses in the supply chain.
First, demand for semiconductors surged during the COVID-19 pandemic, particularly for laptops, gaming devices, cloud infrastructure and home networking. As millions shifted to remote work and learning, manufacturers struggled to keep up.
At the same time, supply chains came under pressure. Factory closures, shipping delays and logistical bottlenecks all slowed production. The automotive sector, which had relied on just-in-time ordering, cancelled orders early in the pandemic and was left without capacity when demand returned.
Underlying all of this was the world’s reliance on just a few key foundries. Companies such as TSMC and Samsung handle most of the world’s advanced chip manufacturing. When those factories reached capacity, smaller players had few alternatives. Trade tensions between the US and China further complicated sourcing, particularly for Chinese manufacturers affected by export restrictions.
From Crisis to Adjustment: 2020 to 2025 Timeline
The semiconductors shortage unfolded in waves, shifting in focus as supply and demand evolved.
2020–2021: Automotive and Consumer Disruption
The early semiconductors shortage hit the automotive sector first. Cancelled orders during the pandemic left manufacturers unprepared when demand returned, delaying millions of vehicles. Consumer electronics soon followed, with long lead times affecting phones, laptops and appliances.
2022–2023: Recovery and New Pressures
By 2022, general chip availability began to improve. Production capacity expanded and some normality returned. But the rise of AI created a fresh bottleneck in high-performance components, particularly around memory and packaging.
2025: Stabilisation With Ongoing Constraints
While the broader semiconductors shortage has eased, advanced AI chips remain difficult to source. Packaging capacity is still limited and demand continues to outpace supply. The semiconductors shortage has not ended: it has simply shifted.
Market and Investment Impacts
The semiconductors shortage had a mixed impact on global markets.
Industries dependent on stable chip supply, including automakers, industrial equipment producers and some consumer electronics firms, faced production delays and lost revenue. Their share prices suffered as a result.
Contrastingly, chip manufacturers with exposure to AI and cloud computing gained significantly. The need for specialised components, such as GPUs and AI accelerators, allowed firms in these niches to command premium prices.
Tech indices surged as investor sentiment shifted toward companies tied to AI infrastructure. However, this also increased concentration risk in major indices, as a small number of chip-related firms drove the majority of gains.
Nvidia and the Semiconductor Supply Chain
No company benefited more from the evolving semiconductors shortage than Nvidia.
With demand for generative AI, autonomous systems and large-scale data processing rising sharply, Nvidia’s GPUs and AI platforms were in exceptionally high demand. Yet global capacity to build and package such chips was limited.
These constraints allowed Nvidia to charge a premium for its hardware, contributing to record-breaking earnings. In mid-2025, Nvidia briefly overtook other tech giants to become the most valuable company in the world.
Its rise underscores how the semiconductors shortage reshaped the technology landscape, creating both winners and losers depending on supply chain position and product focus.
Looking Ahead: What to Expect Beyond 2025
Governments have taken steps to reduce reliance on a small number of suppliers. The US CHIPS Act and EU Chips Act are funding new fabrication plants and infrastructure, though much of this capacity is still under construction.
Chipmakers have also invested heavily in expanding advanced packaging and memory production to address the latest semiconductor shortage issues. However, there are risks that demand for AI hardware will grow faster than the new supply.
For manufacturers, this highlights the need for proactive procurement strategies. Multi-sourcing, early contracting and closer supplier relationships can help reduce risk. In training environments, understanding how supply constraints affect component selection and build planning is increasingly important.
A.R.T.’s soldering course is an ideal starting point for technicians needing to adapt to changing component types and assembly requirements caused by shifts in availability. Coupled with our PCB C1 course, it helps businesses throughout the UK cope with any current or future semiconductors shortages they might experience.
Conclusion: Lessons From the Semiconductors Shortage
The semiconductors shortage was more than a temporary disruption. Between 2020 and 2025, it revealed major weaknesses in global sourcing and reshaped entire industries. While lead times have improved, persistent constraints in packaging and AI chips show the semiconductors shortage is far from over. With over 35 years’ experience, A.R.T. continues to support the sector through practical training.
