Have you been to an online store recently and seen a new electronic out of stock. From gaming consoles to cars, the world is in the midst of a major shortage; a silicon shortage. With the incredible demand for computer chips since the pandemic, with everyone working from home, computer chip sales reached $40 billion alone in January 2021. As many daily items become smarter, like watches and fridges, manufacturers are having a more difficult time keeping up with demand.
Why Is There Such a Big Shortage?
Because of the pandemic, many people have been forced to work from home, resulting in a huge surge in demand for computer chips. With car sales decreasing at the start of the pandemic, many of these car companies reduced orders for silicon wafers used to make chips. These wafers were then used to create chips for mobile devices and personal computers, to keep people entertained during the pandemic. However, car sales and demand have steadily increased throughout the pandemic, and now car companies are fighting for chip allocation with other companies, with console, personal computer, and phone companies seeing record sales, as people try to stay entertained at home.
Why Can't More Chips Be Made?
Companies that make these chips have limits on capacity, and building new factories is expensive and takes a long time. Chipmakers mostly ignored cars, since they used older technology, which makes less profit than smartphone and computer chips, which are more complex, and therefore more expensive. The US and China are now in the process of building chip factories, to ensure their own supplies of chips, and to improve the current shortage in the world. Taiwan, where most of the world's chips are made was also hit with a large drought, as one of the largest chip manufacturers, TSMC, uses 156 thousand tons of water each day. They are now bringing water to the factory in truckloads.
Which Companies Are the Worst Affected?
Entertainment, specifically gaming companies have been affected severely by this shortage. NVIDIA and AMD have been in short supply of graphics cards and computer processors. AMD also creates the chips for the new Xbox and PlayStation consoles, facing a similar stock shortage. Volkswagen, Ford, and Toyota have also had to shut down factories for months because of the chip shortage.
When Could it End?
Analysts believe that it could take at least a year for manufacturing to catch up again, and for stock levels to improve. Some data has shown that the semiconductor industry has been close to full capacity for years now, without a buffer to account for any sudden increases in demand. These kinds of shortages have happened before, due to newer technology that requires updated factories, and disasters. With the US president signing an executive order for $37 billion dollars to build chip manufacturing plants in the US, the situation may improve, but it will definitely take time.
What to Do If Something Is Out of Stock?
Gamers have been quite heavily impacted by the chip shortages, with gaming consoles and graphics cards being sold out virtually everywhere. Stores are starting to hold lotteries for the chance to buy items, as crazy as it sounds, and more online stores are implementing bot protections, so stock doesn't sell out instantly. These include special puzzles and quizzes that bots can't solve. There are also entire services that are dedicated to notifying you instantly when a product is in stock.
Written by Overclocked RGB
The Anonymous Helpers (TAH)