The Global Chip Shortage

    The global chip (microchip) shortage is a huge problem for many industries. Caused by a variety of different issues ranging from a global pandemic to unexpected demand, it is having huge consequences. It is a huge challenge for consumers and manufactures alike as it impacts computing, cars, household appliances, and many other industries.

    As one would expect from such a shortage, the industry that it is having the largest impact on is the semiconductor industry. Building a pc is significantly more difficult right now than it usually is because many parts are often sold out. Making the situation worse, scalpers are buying up graphics cards and trying to resell them at higher prices which is only increasing the issue. It is also having an impact on larger companies as they often are needing to use different components than they would like as they have a hard time getting enough of the components that they need for their electronics.

    Car manufacturers are also having a hard time keeping up with demand simply because of the processor that they need for their vehicles. Just the absence of one small component can completely stop production. This has also caused the price of used cars to rise because people can’t purchase new ones.

    So why is this all happening? There are many factors at play here and unsurprisingly, COVID-19 is one of them. Many companies, especially car companies expected that with a pandemic and people being laid off of work, they would have less money to spend on luxury items, thus hanging onto older things for longer. While for the auto industry this did happen for a couple months, after people started to realize the minimal effect it was having, demand increased again. However, with orders for the processors already canceled and semiconductor fabs working at 100%, they were unable to get the chips they needed. The increase in video conferencing and work-from-home also made sure that computer manufactures were plenty busy as people rushed to upgrade their home setups.

    Overall, the problem breaks down to poor planning and having everything based around a couple of countries instead of diversifying the means of production. This huge shortage will not be solved quickly as fabs take years to build. We will simply have to get pretty comfortable with this for the next while.