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. PHOTO: REUTERS
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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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