Hiding beneath the shiny surfaces of our mobile phones, games consoles and cars, computer chips work away unseen — yet we rely on them utterly to run the devices that make our daily lives possible. The pandemic has caused unprecedented swings in demand for these vital components. Lockdowns have brought a boom in sales of consumer electronics, while carmakers have had stop-start runs of production. When sales of vehicles unexpectedly revived in the second half of last year, chip manufacturers were unable to cope with the surge in demand. Already stretched supply chains were unable to respond in time.

The current disruption has prompted companies to re-examine their inventory levels and whether they keep a big enough backlog of components, as well as whether they have become overdependent on certain suppliers. The shortages are caused by stresses at various points in the supply chain, not by their global nature. Nonetheless, they have inevitably reinforced concerns about the length of supply chains and the west’s dependence on Asian suppliers. Just as during the early days of Covid-19 the scramble for essential medical equipment triggered calls to reshore production, so has the current chip shortage reinforced calls to bring the manufacture of semiconductors back to western markets.

The US dominates the global chip industry but most of its companies rely for the manufacturing of their products on fabrication plants in Asia. Corporate giants such as Apple and Amazon are designing some of their own chips but still rely on Asian manufacturers. Car companies also depend heavily on the likes of South Korea’s Samsung and Taiwan’s TSMC for these critical components. President Joe Biden is set to order a comprehensive review of supply chains for critical goods. In a similar vein, European politicians have been agitating for greater investment in domestic industry. The European Commission has launched an initiative committing member states to strengthening the bloc’s domestic semiconductor industry and to expanding its presence across the supply chain.