You may have seen in the news recently that there is a global shortage in computer chips. Such headlines can always be alarming, making people wonder if they need to start panic buying for the future.

However, a chip shortage (aka semiconductor chips) may not seem as catastrophic as the great toilet paper shortage of 2020, but we use chips in more than just computers and they are found in many of our daily electronic items such as TVs, phones, toothbrushes, cars and games consoles.

But what exactly has caused this shortage and how will it affect you and your business?

What caused the chip shortage?

Initially, the main cause of the microchip shortage was the closure of the manufacturing plants that produce them in 2020 as a result of the global Covid-19 pandemic. This should, however, have only been a temporary delay.

It was believed once the factories reopened they would catch up with demand and everything would go back to normal.

However, in the time that this industry and other businesses had closed down around the world, people were adapting to a new way of living. This meant once the chips were again being produced, they were now producing for an altered market with a much higher demand.

This demand is driven by an increase in home-based entertainment like TVs and game consoles as well as a surge in setting up home offices and all the new equipment that requires. Even driving habits have changed and more people are turning to electric cars, even before government initiatives to introduce more of them into the market is instigated.

All of this is adding to the pressure on the manufacturers of chips which has led to the global shortage, which is only likely to get worse before it gets better with some experts claiming the shortage could last until2023.

What is the day to day impact?

The impact of the shortage has already been felt by big business with Apple being forced to delay the launch of the iPhone 12 by 12months, and Ford have been forced to cancel shifts at its manufacturing plants due to the shortage.

Car manufacturers who had to cut their orders for chips during the lockdowns due to a reduction in sales, now find they are at the back of the queue. Needless to say, this delay is costing these global organisations billions of dollars.

But how is this going to effect you and your day to day life?

As can be expected, this is primarily going to effect the consumer’s pocket as anything requiring a chip – cars, PCs, TVs, Internet of Things – is going to be more expensive. Additionally, in the future it may become more problematic for manufacturers to get the chips they require to produce everyday products like washing machines or smart toasters.

Some companies who require chips for manufacturing may be required to adjust circuit boards within their products to fit chips which are available rather than the ones they would ordinarily use. And some car manufacturers, such as  Nissan for example are removing certain features from their cars such as navigation systems as they can’t get the chips to produce them.

Therefore, it could be the case that some products are not of the same quality with the same functionality as perhaps consumers have been led to expect. Not to mention that delivery times are massively extended on new products to count for the delays. Dell, for example have a 120-day delivery on new hardware at the moment.

So, bearing this in mind, now is not the time to be buying new tech – or at least emergency tech. If you don’t mind waiting a little longer for a new PC or a phone, and potentially paying a little more then the chip shortage may not have much of an impact.

But if you are running your business, for example on old tech which you will need to replace quickly once it stops functioning this could be more problematic. It is a time to think ahead about what hardware you may need later on in the year and order now in anticipation.  

If, however, you would like to have a chat about elongating the lifespan of your PCs, laptops and devices – at least until the shortage is over - speak with SupportWise today.

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