Last year, Covid-19 created a chip shortage that the world has yet to recover from. Demand for electronics surged as entire communities were forced to work and study from home. The shortage was first felt most acutely by the automobile industry, but has also created some disruption in the consumer electronics industry—forcing Apple to stagger its iPhone releases and Samsung to delay the next Galaxy release to 2022.

This has created a lot of conversation about supply chains around the world. In the United States President Joe Biden has focused his efforts on rebuilding the American chip industry—an arduous and complicated task. For now, the shortage is framed as a simple misalignment between supply and demand: The auto industry first canceled their semiconductor orders because they had anticipated a slowdown in business; chip manufacturers found other industries to sell their chips to, and when the auto industry picked up faster than expected they had to go to the back of the line. But there’s more to this story than basic economics.

You Can’t Make Something Out Of Nothing

Producing components for our electronics consumes a lot of natural resources. Let’s start with the nearly 250 different types of materials found in a typical smartphone, many of them mined at the beginning of the cycle, and recklessly disposed of at the end (not to mention the human toll caused by the injustices of the mineral extraction business). Then there’s the power and water that today’s chip mega-factories require to churn out these devices. A typical semiconductor fab requires 2 to 9 million gallons of water per day and uses enough electricity to power 50,000 homes.

That type of consumption has a profound impact on the Earth and the people that depend on it. Just ask the rice farmers in Taiwan. Taiwan is the epicenter of semiconductor manufacturing and it also happens to be in the middle of a drought, causing the country to go to great lengths to keep water flowing to its all-important semiconductor industry and shutting off irrigation to legions of rice growers. While the farmers were compensated for the disruption, they couldn’t put food in people’s hands. It’s also worth noting that the world largest contract chip maker TSMC, consumes nearly 5% of the total power produced in Taiwan, a percentage that will only grow as more factories come on line.

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