impossible to Get a PS5, your iPhone is on lag, and no one has seen a graphics card in the wild in months. It seems that no matter what kind of electronic gadget you are looking for, it cannot be found. What is happening in the world that is going on? The short answer is the global chip shortage caused by a confluence of factors ranging from the ongoing pandemic to geopolitical tensions and, as always, some crypto bullshit.
The long answer is… complicated.
As usual, Covid is the obvious problem
It’s easy to leave your mind most days, but every device you own — including the one you’re using to read this article — consists of dozens of custom-built microprocessors that require more specialized factories to manufacture. This was already a complex process to maintain, but when the pandemic hit in early 2020, it threw a metaphorical wrench into literal gears.
The rise in working from home has been linked to the growing need for more devices. Remarkably, webcams ran out of stock almost immediately as millions of people turned their meetings into video chats and wanted something that looked better than the webcams built into their laptops. Similar pressures to buy new laptops, phones, tablets, headphones, and dozens of other devices are putting a strain on microprocessor supply. At the same time, the demand for cars – which also requires dozens of built-in electronic devices –Dropped in early 2020.
Factories that make microprocessors don’t work on a dime. Since most chips require very specific manufacturing processes, it can take weeks or even months for a workflow to start filling an order for certain parts. It takes time for a factory that, until recently, was mass-producing touch screens for new cars to focus on making screens for iPads.
Simply put, it’s hard to keep up with the demand for electronics smartly even in a typical year, and 2020 was the furthest from usual. And the epidemic is not over yet. Taiwan was until recently largely free of Covid cases, but a sudden and accelerating rise may eventually cause, according to a Taiwanese representative, to “logistical problems“If the country can’t get more vaccines.
Manufacturing accounts in Taiwan For more than 60 percent of global semiconductor revenue. In other words, the majority of processors used in electronics worldwide come via Taiwan. With the increased demand for some devices, the sudden and intense shift in the type of devices consumers needed, and the increased pressure to stay in operation during a pandemic, shortages were bound to occur.
Perhaps more predictably, Semiconductor prices began to rise To match this request. Not only is it hard to get enough of some hardware, but soon enough it could be more expensive as well. Which only aggravates next one Problem.
International trade relations cause more headaches
Deconstructing the complex nature of international trade disputes is a bit beyond the scope of a single illustrative article, but what we can say for sure is that it’s not just a matter of high demand that makes wizards more difficult to obtain. Having the vast majority of the world’s semiconductor manufacturing based on one continent has not been ideal for other countries. The United States in particular has not always played well.
In late 2020, shortly before leaving office, President Donald Trump Put restrictions in place on the Chinese manufacturer SMIC. This led, in at least one case, to a car maker moving microprocessor manufacturing to Taiwan, which only made Taiwan manufacturers even overburdened. In a way, this move was an extension of the Trump administration’s feud with Huawei, which in turn was an extension of the United States. A much more complex relationship with China’s position in the global economy.