Semiconductors, the building blocks of the digital economy, are in short supply. These shortages are a product of poor planning during the COVID-19 pandemic, as well as a production model that relies on global supply chains, which are subject to interruption.

This situation has spurred governments across the world to action. Several, Japan among them, are providing support to chipmakers to increase production. While governments should work to ensure a steady supply of chips, it is vitally important that any solution not create more problems. A cooperative, multilateral approach is required.

In January, global semiconductor industry sales rose 13.2% from a year ago, reaching $40 billion. Nevertheless, companies in almost every industrial sector continue to complain of shortages that prevent them from meeting production schedules.