Why the bust after boom in semiconductor chips | Mint Primer

Earlier this year, the biggest challenge facing the global semiconductor chips industry was its shortages. Global chip sales rose 26.2% in 2021, sharply above the projection of 6.3% made in late 2019 by the Semiconductor Industry Association (SIA). Top semiconductor players announced expansion plans. Venture capital investments into semiconductor startups more than tripled in 2021. This year, the mood has changed. Shares of major semiconductor players have plummeted, and the Philadelphia Stock Exchange Semiconductor Index, an index of 30 semiconductor companies, has dropped 24% this year, against a 13.6% fall in the S&P 500 index. Let us identify a few crucial things that contributed to the bust after the boom in semiconductor chips.