News analysis

Why shortages of a US$1 chip sparked crisis in the global economy

The trouble for the chip industry is that there aren't enough display drivers to go around.
The trouble for the chip industry is that there aren't enough display drivers to go around.PHOTO: REUTERS

SEOUL (BLOOMBERG) - To understand why the US$450 billion (S$603.6 billion) semiconductor industry has lurched into crisis, a helpful place to start is a US$1 part called a display driver.

Hundreds of different kinds of chips make up the global silicon industry, with the flashiest ones from Qualcomm and Intel going for US$100 apiece to more than US$1,000. Those run powerful computers or the shiny smartphone in your pocket. A display driver is mundane by contrast: Its sole purpose is to convey basic instructions for illuminating the screen on your phone, monitor or navigation system.

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