The global chip shortage is affecting your day to day life and this is why.
It’s no secret that Covid-19 shook the world in 2020. It caused a ripple effect that will continue to influence the economy and society for future generations. There are unknown side effects that can only be brought to light when more time passes.
However, the global chip shortage was a major drawback that was felt immediately. It’s been 2 years and individuals, companies, and manufactures are still trying to navigate these unforeseen conditions with no end in sight.
How does the chip shortage affect you?
Delayed releases, increased shipment times, inflated prices. Not to mention many companies have been forced to close, making availability and accessibility much harder.
Since the start of the pandemic, the world has become more entwined with technology and now nearly every facet of our lives is built around it. This means serious consequences beyond just the scope of technology.
Top Industries Suffering Due to Chip Shortage
- Auto - arguably the industry taking the biggest hit during this shortage. Modern vehicles require sophisticated sensors and other electronic parts that require chips. With lack of available parts, companies have slowed or completely halted productions. This has led to drastic cutbacks and employee layoffs. With less new cars being produced the value of older used cars has skyrocketed. This is the first time in history that you’ve been able to sell your car near the purchase price.
- Consumer Electronics - the pandemic has been a catalyst for reviving Desktop PCs. To quote Canalys, the worldwide PC market posted an increase of 55% in just the first quarter of this year, which is reportedly the highest it has been over the last 10 years. This is largely in part due to everyone working from home and students forced into virtual learning. An increase in popularity and demand with lack of supply means higher prices and little availability. Companies will be bleeding money with lower profitability.
- Medical - Treatment and care for many at risk individuals were postponed due to the pandemic. The healthcare system is overloaded with patient backlogs and with this massive amount of demand there is inevitably a need for more medical devices and equipment, most of which require chips and sensors. There have been efforts by companies and governments to prioritize medical technologies but there is still no guarantee as they are competing with other industries for a limited supply of critical chips.
- Power - with renewable energy becoming more of the status quo, it’s no wonder that they are controlled and managed by electronic parts, such as sensors and semiconductors. Wind turbines and solar panels are relied upon by thousands of people, especially with the incline of energy consumption from work at home behaviors. If companies can’t build these vital energy resources, it will prevent adoption by consumers and businesses leading to layoffs and cutbacks.
The global chip demand is projected to double between 2022 and 2028. Companies such as Intel have predicted it will take years to fully address the problems caused by the chip shortage. Until the chip supply chain starts to normalize, everyone can expect to feel the ramifications in at least one aspect of their lives or another; whether you're buying a new car, scheduling your next doctor appointment, or even purchasing a PC.
Resources:
https://www.advancedtech.com/blog/how-is-the-coronavirus-impacting-manufacturing/
https://llllllll.co/t/scarcity-and-precarity-in-small-manufacturing/55896
https://www.nam.org/how-cloud-computing-could-help-chip-manufacturers-15463/