Above the Fold

Chip Shortage Stifling Global Commerce 

From mobile phones and TVs to video cards, phones and the automotive industry, a global chip shortage is not only pushing prices sharply higher, but has triggered factory shutdowns in some industries. Chips (aka microchips) are semiconductors, made from materials like silicon, and they are in just about every powered device we use. Needless to say, the chip deficit has reached a crisis point and it’s likely to hit the bottom line of thousands of companies. 

Pandemic-related delays in chip production and shipping initially created a supply issue that was already generating massive shortgages with the rising demand in consumer electronics. Even the venerable Apple, with its diversified and dedicated supply chains, had to delay the iPhone 12 last year due to the shortage. And now that social restrictions around the world are being lifted, consumers’ demand for more varied products (many of which are powered by chips) is increasing exponentially, taxing an already limited supply beyond its capabilities. 

Samsung, the world’s second-largest producer of chips, has even said it may have to delay the launch of its latest premium cell phone due to the semiconductor crisis. Automakers are scaling back production and even shuttering plants as the increasing dependency on automation is making it impossible for new autos to be produced without the steady flow of semiconductors.

Three Things 

1. Where’s the “Stimmy” Going? – New data from Bank of America Global Research shows Americans are spending significant portions of their stimulus money on athletic apparel and footwear. Spending in that sector jumped 19.5% year over year, while solitary leisure spending jumped more than 40% over the same period. Using credit card and banking data, Bank of America was able to see high correlations of spending right after the money hit accounts. Bikes and campground spending also saw accelerated gains. 
2. Amazon Forcing Driver Surveillance (and Threatening Job Loss) – Amazon delivery drivers in the U.S. will now have to consent to biometric and artificial intelligence (AI) monitoring. The company has installed AI-powered cameras and other sensors in its delivery vans to monitor driving habits and even alert the driver (and Amazon) if they seem drowsy or unattentive (e.g., texting and driving, tired, etc). The company sees the surveilling as a safety benefit, but many drivers feel micromanaged, especially since they don’t have a choice in the matter. 
3. Texting for Fried Chicken; Yeah, It’s Now a Thing – Yum Brands, the owner of KFC, Taco Bell and Pizza Hut, will start taking orders via text. The global food giant recently acquired Israeli startup TicTuk Technologies (no relation to TikTok) to improve its text and social-media-based ordering systems. The company is banking on a rise in digital pre-ordering across its stores to keep the customers it gained during the pandemic.  

Did You Know?

The EU Took This Big Step 64 Years Ago

On this day in 1957, West Germany, France, Italy, the Netherlands, Belgium and Luxembourg signed a treaty in Rome establishing the European Economic Community (EEC), also known as the Common Market. The agreement was one of the first steps toward improving Europe’s economic climate, as the Soviet Union still controlled much of the East, and post-war America was thriving. The accord was both one of nuclear peace and the beginning of free-trade, transportation and economic relations between participating European nations. In 2009, the EEC was absorbed into the current European Union’s framework, which now includes 27 nations.