Is the world actually running out of everything?

This question might sound like an overdramatization of the current climate of the global supply chain, but it’s pretty on point as manufacturers, their customers and consumers read article after article about the latest shortages. From workforce shortages, the deterioration and struggle to allocate raw materials, major backups at trade ports and an imbalance in supply to meet demand, it’s hard to predict what the future holds for many industries.

Dwindling Resources Across the Board


Aluminum, which is commonly used to manufacture passive components, has soared in price to a record high since 2008. In Q3 2021, it reportedly hit $3,000 a ton for the first time in 13 years in a “supply snarl.” Labor disruptions due to COVID-19 outbreaks have limited production, which doesn’t help the matter as producers, traders and shippers see demand surpass supply output by a longshot. Shipping bottlenecks and the current government-mandated power cuts in China, which is an aluminum producer along with Guinea and Jamaica, will likely contribute to the industry’s supply issues, which are projected to continue through the rest of this year. The price fluctuation of aluminum has led to an incremental increase of the price of high voltage aluminum foils throughout 2021, with the most recent price increase of 2-3% in Q3.

In the same bucket, aluminum capacitor production output from factories in Malaysia has dwindled amid COVID-19 outbreaks affecting workforce capacity at various manufacturing and packaging sites, with some facilities completely shutting down in July and August. This may lead to a 30-60% overall reduction in shipment output of passive components for automotive, gaming and PC parts this year. The lead times of aluminum capacitors are stretched up to six months or through the rest of 2022 in some cases. Taiwan and China are reportedly absorbing the orders with 3- to 6-month delivery times to relieve customers shifting from the Malaysia factories struggling to handle the demand. Panasonic, in particular, is an aluminum capacitor supplier that reportedly has lead times stretching to August 2022.


Meanwhile, the price of copper has surged throughout 2021 with its high demand in various industries. A looming shortage is anticipated with the increased use of copper in the “green energy revolution,” notebook usage during the COVID-19 work-from-home uptick, as well as demand in automotive and consumer electronics. Copper for copper foils, which are used in copper-clad laminates (CCLs) required to make printed circuit boards (PCBs), are impacting the supply chain all the way from the manufacturers to end-user delivery. The price of copper foil has surged 35% since December 2020. The trickle-effect in the rise in copper, copper foil, CCLs and PCBs, as well as manufacturing, will likely have direct impact on motherboards, GPUs and other electronics.

The looming copper shortage is in the spotlight in tandem with the global chip shortage. In a recent Wall Street Journal article, major semiconductor manufacturers, Intel, AMD and Nvidia emphasized the essential role of substrates in chipmaking and potential solutions to improve the supply chain after experiencing various issues with allocation from substrate producers. Copper makes up the substrates to “transmit user instructions to a computer’s chips and relay the answers.” The demand for substrates and central-processing units is anticipated to continue its rise as increasingly powerful chips enter the market alongside technological advancement, which means copper prices will subsequently reflect in manufacturing and delivery as well.


To add to the back-to-back hits manufacturers are taking, the silicon-price surge is driving some companies into crisis-mode as they declare force majeure. In the past two months, the price of silicon has risen by 300% and is anticipated to stay high through next summer or until production can ramp up to meet demand. The common denominator of this surge is China’s government-mandated power cut, which has ordered silicon producers to cut production by 90% from September through December according to Bloomberg. Roughly 15% of silicon is produced and refined to be used in semiconductors, which means this price surge will likely reflect down the supply chain in commodity pricing and lead times.

Raw Material Shortages Aren’t Going Away Anytime Soon

Shortages across different material types are not a new problem for manufacturers, but the rapid pace of deterioration across the board is a big red flag for global economies. The lack of relief with China’s power cut is simultaneously impacting production operations of raw materials, such as aluminum and silicon, and semiconductor-company operations at factories there. Additional struggles to navigate COVID-19 lockdowns and enforced workforce capacity limitations are making it difficult for manufacturers to produce supply to meet demand, adding to a wary outlook for 2022 and beyond.

So, while the world isn’t quite at the point where it’s running out of everything, the raw material shortages are leading manufacturers, their customers and consumers to hold tight amid persistent global supply chain woes.



Let Fusion Worldwide solve your supply chain needs.

EMAIL: GIVE US A CALL: +1.617.502.4100