In spring 2020 carmakers cutting production because of the pandemic cancelled their chip orders; in the same months a world shifting to remote work sent demand for laptops, cameras and servers soaring. Semiconductor plants moved capacity that way. When car demand recovered faster than expected, manufacturers had to rejoin the queue — but building a new fab takes two to three years and a production cycle itself takes three months. The result was hundreds of billions of dollars in lost output in 2021 and long delivery queues; some cars were sold with features missing.

What the crisis really exposed was concentration. Almost all of the most advanced process nodes sat with TSMC in Taiwan and Samsung in South Korea, while the extreme-ultraviolet lithography machines that print those chips came from a single company anywhere in the world: the Dutch firm ASML. A chain built this thin in the name of efficiency could not absorb the failure of one link.

The response was a return of industrial policy: the United States announced $52 billion in support through the 2022 CHIPS Act, the European Union passed its own Chips Act, and Japan and India subsidised new fabs. Over the same period semiconductors moved to the centre of export restrictions between the United States and China. Taiwan's weight in production turned the island's geopolitical position from an economic question into a security one. The shortage had largely eased by 2023; the lesson it left concerns the fragility of a global manufacturing system built on just-in-time and lowest-cost principles.