Saudi Arabia’s semiconductor sector to benefit from global chip shortage

Lack in the availability of semiconductor chips worldwide is expected to provide a silver lining to Saudi Arabia’s local semiconductor industry in the upcoming years. The COVID-19 pandemic has led the regional industry to go nine yards for escalating its semiconductor production in a bid to decrease its dependency on foreign manufacturers. In fact, the global shortage has pushed chip stocks in the country to record highs.

According to a reliable report, it was suggested that chip prices are expected to increase by up to 6% this year, while the delay is likely to cut short the production. Meanwhile, automaker Ford mentioned that the it could witness a production cut of 20% as a result of the shortage of supply.

Speaking on the recent move, Professor of cybersecurity at King Saud University and CEO and founder of the Global Foundation of Cyber Studies and Research in Washington- Dr. Muhammad Khurram Khan- has cited that the importance of semiconductors cannot be denied due to their massive need in IoT, consumer electronics, computers, and smartphones.

However, the global semiconductor scarcity and its unparalleled demand amidst the pandemic has intensified the situation for an expansive array of industries. It has enforced defense, automotive, industrial, and other manufacturers to cut down the production and even shut the assembly lines for a tentative time span.

He added that if the current pandemic situation prevails for the next few months, there are chances that the Kingdom might also observe a hike in price for electronic goods. Therefore, it is highly important for local importers, consumers, and businesses to plan accordingly.

He further mentioned that the ongoing supply shortage worldwide also stands to be the catalyst for Saudi Arabia to invest more in the sector and develop its domestic capabilities in the years to come. This initiative would eventually reduce the country’s dependence on imports, address local production demands, and boost the economy of the Kingdom as per Saudi Vision 2030.

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By Shreya Bhute

With corporate exposure in software and marketing, Shreya was always intrigued by content development. Having pursued her graduation in I.T. engineering, she works as a content writer for and jots down news articles across distinct domains including technology, business and healthcare.