Have you picked up on it too? Rising car prices. A shortage of computers to purchase. This is all because of the globally-impacting chip shortage. What’s a chip? It’s the layman’s term for semiconductors that make things, well, work. They conduct simple operations, like turning a light on and off, and run the highest-end devices you can think of, like a Tesla! They are the brain/main processor of devices.
Why is there a shortage? A few reasons:
- The increased demand for personal electronics is due to quarantining at and working from home.
- People are buying more cars due to 0% financing offers, home delivery services, and people’s urge to escape their houses post-quarantine.
- On top of an inability to keep up with demand, a Taiwan chip company had to halt production due to an influx in COVID cases, and a fire at one chipmaker plant in Japan delayed full production for months.
Unfortunately, this shortage doesn’t appear to be as short-lived as the Colonial Pipeline-induced fuel shortage. This delay may last a year or two! GM has tens of thousands of vehicles parked, simply awaiting chip parts. This is impacting the world of information technology as well. While our IT consulting services used to be able to provide new machines to our clients the next day, our managed IT service providers are now not even given estimated shipping or arrival dates. Our IT services company has been given allotted purchasing spots, and fulfilling those purchases could take eight weeks or more.
Of course, we will keep our clients and the public updated as this shortage goes through its ebbs and flows on a day-to-day basis. If anything, we are being reminded yet again how interconnected our world is. For now, please be patient. We understand your teams are beginning to grow again as you hire post-pandemic, and we’ll get more workstations to you as quickly as possible!
UPDATE August 30, 2021:
In response to the shortage, there has been a quality-control crisis. Businesses are unintentionally purchasing, what turns out to be, inoperable chips. They often arrive in incorrect proper packaging, empty on the interior of the chip, with original markings discoverable underneath the counterfeit label. There are complaints daily about these false chips failing to work. “Electrical testing [to confirm authenticity has] nearly quadrupled this year” and costs tens of thousands of dollars. Thankfully, many businesses have improved testing capabilities, decreasing the odds of fake chips ending up in finished products. “There are [also] growing sales for special X-ray machines to identify those counterfeit parts.”
To ever-intensify the problem, a COVID-19 outbreak in Malaysia has further elongated the chip shortage. Therefore, many factories across the globe have had to halt production. Scania stopped European truck production; Stellantis halted production at the largest van plant in Europe; Volkswagen shut down production, Ford cut production of the F-150; Toyota plans to cut output by 40% in September; GM and Volvo also halted their assembly lines. For automobiles continuing to be made, while some chip-powered features are necessary, such as airbags, others are being omitted–such as wireless charging and navigation systems.
The shortage isn’t just impacting the automotive industry–medical devices, PCs, and gaming consoles all are awaiting chips, and therefore, have inflated price tags. “Apple CEO Tim Cook warned last week that a limited supply of semiconductors would hurt sales of iPhones. Microsoft is struggling to make enough Xbox consoles and Surface laptops.” Because this shortage is projected to last into 2023, the White House is “racing to expand chip manufacturing in the US to avoid future shortages.”