Semiconductor shortage is the top supply chain risk of 2023
Source: Middle East Insurance Review | Feb 2023
One of the biggest supply chain risks of 2023 is the worsening of the global semiconductor shortage, according to a new survey.
The survey of manufacturing industry professionals conducted by Hubs, a Netherlands-based, online platform for custom part manufacturing found that the top five risks include: port congestion, inflation hampering demand, China COVID policies and carbon emissions regulations.
The survey found that the supply chains risks led by concerns that escalating tensions between China and Taiwan could trigger a military conflict in the region and destabilise Asia. That scenario could have serious consequences for global supply chains, since Taiwan is a leading producer of semiconductor chips, and disruptions to its production capability could impede the production of smartphones, computers, vehicles, and electronic appliances.
These looming threats follow a year of supply chain troubles for many organisations. The survey found that 76.6% of companies experienced some form of external disruption to their supply chain over the past year. The top cause of that disruption was material shortages (60.9%), followed by COVID-19 (57%) and transportation/logistics issue (52%). The rest of the list included: rising energy costs, container shortages, port congestion, natural disasters, and trade wars.
The survey found that though many companies believe supply chain resilience merely implies the ability to manage risk, true resilience enables the organisations to deal with and even benefit from disruptions.
The report said the five major strategies to mitigate disruptions include creating autonomy; developing flexibility; geographical diversification; agile internal processes; and supply chain monitoring. M