If you’ve been doing virtual school for a while, chances are you wanted to get a technology upgrade. Maybe your phone, maybe your computer; however, this demand is what caused the global semiconductor shortage and the reason you won’t be able to do so anytime soon.
What is the global semiconductor shortage?
Due to the large demand for computers at the start of the pandemic, the top semiconductor manufacturers, such as TSMC, Samsung, and Qualcomm had to close their factories temporarily due to the COVID-19 outbreak in China. Semiconductors are used to create chips, such as the ones in your phone, laptop, or even car. Yes, production is currently back to normal, but the demand is still relatively high and companies are still trying to keep up. However, this is not the only reason for the shortage. The global trade war between the U.S. and China is causing an even larger issue. One of the largest semiconductor companies known as SMIC has already been banned in the U.S. for security reasons. According to Clear Metal, which monitors over 90% of ocean freight, nearly 7% of ocean freight is not making it out of China ports either. Chips can take months to complete so even if companies try to speed up the process of creating chips, it will also take a few months for them to be available. Alongside the shortage, scalpers are grabbing up different computer parts in order to sell them on platforms like eBay at a hefty price due to market inflation.
What items are affected?
Pretty much any product that requires a Silicon computer chip will absolutely be affected. Phones, (Smart) Fridges, Cars, Computers, TVs, Manufacturing Plants, 5G Towers, and many many others. According to Koh Dong-jin, the CEO of Samsung, “Samsung's release of a new Galaxy Note smartphone may now be delayed until 2022.”
What can I do?
The sad truth is, the only real solution to this problem is time. Companies like Intel and TSMC both set out $20 billion and$100 billion respectively to increase capacity; however, this will probably take years, or even decades to implement, and chances of getting your brand new shiny next-gen console in the next few months are pretty slim. If there is something we have learned from this shortage that is clear, it’s that you must have an agile supply chain that is ready for major changes such as the pandemic.