The recovery phase introduces a new complexity: a potential shift from shortage to surplus in certain component categories by 2024, driven by the aggressive capacity build-up.

Manufacturers are now faced with the challenge of carefully balancing inventory to avoid overstocking components that might become obsolete quickly. The geopolitical risks associated with semiconductor production remain high, prompting governments worldwide to incentivize domestic manufacturing.

The US CHIPS Act and similar legislation in the EU are injecting billions into localized production ecosystems, aiming to reduce dependence on a single geographical region for vital components.

This push for regionalization will fundamentally alter the structure of the global supply chain over the next decade. For the automotive industry, which suffered the most severe production cuts, the increased chip supply means that production backlogs can finally begin to clear, potentially stabilizing used car prices and increasing new vehicle availability for consumers in the coming quarters. The long-term lesson for all industries is the necessity of maintaining diversified, resilient supply networks rather than relying solely on cost efficiency.