Game consoles, graphics cards, processors, and so much more have been hard to come by lately. The consumer technology industry has suffered a shortage of computer chips, which has impacted the entire global supply. The chip drought has resulted in issues through hundreds of markets such as automotive, cryptocurrency, smartphone, vehicle, television, and a multitude of other technological advancements.
Samsung CEO DJ Koh forecasted “A serious imbalance in supply and demand of chips.”
Limited supply, combined with huge demand, created the chip shortage of 2021. During the 2020 COVID-19 pandemic, at-home entertainment boomed. Working from home caused laptop sales to reach their highest in decades. Cryptocurrency started booming, resulting in high demand for a multitude of high-end processors.
Though gadgets and other technological handhelds have felt the impact first-hand, the automotive industry has been credited with igniting the shortage. In the beginning of the pandemic, automakers ceased orders for processors, anticipating a drop in sales. However, this decision was premature, and vehicle sales rebounded almost immediately. To compensate for the discrepancy, the automotive market attempted to buy back manufacturing, but it was too late. Other sectors were also pushing more production due to high demand. With a maxed-out production capacity, both markets were competing for chip assembly.
Gigantic technology companies such as Microsoft, Sony, Nvida, AMD, Apple, Qualcomm, and more do not actually produce their own processors. TSMC and Samsung build a majority of the world’s cutting-edge semiconductors. Intel is a unicorn in the market, as it manufactures its own processors and has not experienced shortages like its competitors.
Trying to catch up with production is not as easy as it sounds. Extending production lines can drag on for months, and constructing new facilities can take years, not to mention cost billions of dollars.
Forecasts show that chip shortages will continue throughout 2022. According to Xiaomi company president Want Xiang said, “The chip supply crunch is still challenging, but the situation will significantly improve in the second quarter, and such supply woes will be fundamentally solved and even revert in the second half of 2022.”
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Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/