INVESTIGATING THE IMPACT OF MICROCHIP SHORTAGE ON THE SUPPLY CHAIN OF THE EGYPTIAN AUTOMOTIVE INDUSTRY

The worldwide shortage of microchips is one of the concerns related to raw materials that impact the inbound supply chain (SC). Undoubtedly, the semiconductor scarcity has influenced a multitude of businesses; nonetheless, the automotive industry has borne the impact of this crisis to the greatest extent. The worldwide microprocessor crisis can be attributed to a confluence of many factors. The snowball effect of COVID-19 and the Russian-Ukrainian war caused several chip facilities to temporarily close or run at lower levels, causing a microchip manufacturing shortage that affected the entire semiconductor sector. The aim of this study is to investigate the causes and consequences of microchip shortage within the automobile sector with insight into Egypt. To provide potential solutions for mitigating the adverse impact of the microchip shortage, a series of semi-structured interviews were conducted with seven companies operating in the automotive sector and chip manufacturing industry in Egypt. The purpose of these interviews was to investigate the phenomenon and gain a deeper understanding of the crisis and its consequences. Thematic analysis was employed to evaluate the data obtained from the interviews followed by adopting the Analytic Hierarchy Process (AHP) to prioritize the factors that had a role in and led to the microchip shortage. Based on the findings of this research, the most significant determinant affecting the microchip shortage is the demand fluctuations as one of the fundamental reasons behind this was the rising demand for electronics and portables since COVID-19.