From video games to dishwashers, buying almost any product that requires electronic components has become a nightmare in the last two years. The reality is that we find ourselves either with outrageous prices, or with many difficulties to find them for sale. This is due in large part to the scarcity of the most basic component of technology: semiconductors. (Remember that a microchip or integrated circuit is made up of semiconductor material).
In the case of cars, the situation is proving to be perhaps the most devastating supply chain disruption the auto industry has seen in decades, perhaps in its entire history. As a curiosity, you can take a look at the images that the satellites collect in Kentucky, where hundreds of vehicles wait for microchips to finish their passage through the production line.
How Did We Get To This Microchip Shortage?
Over the past year and a half, the global supply chain has been heavily affected by complications related to COVID-19. Factories closed their doors, either by government mandate or at the initiative of the companies themselves. This has caused a delay in production and an increase in demand for products.
Being “locked in” for more than a year has influenced the way many consumers spend their money. Sales of video game consoles, computer components and other home entertainment devices have soared. This makes sense, since they became the few leisure options available to millions of people. On the other hand, as life at home intensifies, many appliances have been replaced by new models with more electronic features. As consumers demanded more electronic products, semiconductors, common to all of them, became a rarity. The case is also that they are produced in a handful of factories throughout the world that, in many cases, had their doors closed for months.
But what is a semiconductor, anyway? And why are car sales affected when people buy too many PlayStation 5s?
Semiconductors are a basic component of electronics. They are neither an insulator nor a true conductor, imagine a drawbridge. When it’s up, it can be thought of as an insulator: electricity can’t get from one side to the other because the space between the two sides of the bridge is simply too big to jump over. This is known as a band gap. When the bridge is lowered, it becomes a conductor, and electricity can travel from one side to the other without problems. This means that under certain conditions (when heat, light, or electromagnetic fields are applied), electricity can jump the gap, resulting in a conductive state.
Regardless of the industry, modern electronics uses thousands, millions, or even billions of semiconductors. And when technologically advanced vehicles start to make use of hundreds of sensors and controllers in a single car, you can see how easily a shortage of a single component, like a seat belt sensor, can affect the production of an entire model.
Related: You can visit Talks Corner for latest interesting tech information.
During the second quarter of 2020, original equipment manufacturers (OEMs) closed their doors, as did most of the world. The fact is that while they were doing it, they canceled orders from a large part of the supply chain. So many disgruntled vendors found other markets that were still up and running, despite the pandemic. These include the big eight cloud infrastructure providers, led by Amazon Web Services (AWS), Google Cloud, and Azure. Demand skyrocketed as people started working from home and students attending class remotely, leading to a massive surge in demand for PCs, tablets, and consumer electronics.
Trade Sanctions And Phone Launches
Gartner analysts expect the global semiconductor shortage to last until the second quarter of 2022. Gaurav Gupta, Gartner’s senior analyst vice president, has said the problems were exacerbated by the launch of 5G smartphones and trade sanctions that the United States imposed. to China before the pandemic. The consequence of the latter was that Huawei, one of the largest manufacturers of 5G smartphones in China, knew that after a certain point, it would not be able to buy chips, so it rushed to buy all the microchips that were available while it had the legal possibility to do so.
Similarly, Apple and other smartphone makers have also placed large orders for chips so as not to run out. This kept factories extremely busy before the sudden increase in demand due to COVID-19.
The Pandemic And Natural Disasters
One of the direct consequences is that they are buying huge amounts of semiconductors. Mobile phone sales remain high and demand for PCs has skyrocketed. This causes a significant shortage of power supplies and other components necessary for personal computers. Especially striking is the shortage of graphics cards, which are being gobbled up by cryptocurrency miners.
As a conclusion, the demand is higher than ever, and continues to increase. The global shortage of semiconductors is affecting unsuspected products. If you want to buy anything with a plug or battery, it’s probably harder than usual to find it for sale, or its price has increased. This includes products from the wireless community, industrial, aerospace, and even military.
In recent months there have also been some natural disasters: a fire at a semiconductor manufacturing plant and an earthquake in Japan. As well as a winter storm in Texas in March, which led to the closure of some factories this year. All this has also contributed to the problem that we analyze here.
How To Survive This Shortage?
As we can see, what we called a “perfect storm” is taking place in the balance of supply and demand for semiconductors worldwide. Demand has never been higher, and supply has never been lower. Consequently, many products are impossible to find for sale, or have their prices shot up well above the recommended sale price.
This issue affects us all, and from Nebrimatica we have also dealt with it with our colleagues. As computer technicians and experts, we can offer the following recommendations to our customers and readers:
- If you need an electronic product of a specific model, buy it as soon as you see it available. Above all, if its price is close to the recommended one. Do not wait for offers or discounts, which will not arrive in the foreseeable future.
- If you can afford to wait before renewing a generic product that works perfectly, such as a television, dishwasher, personal computer, etc., do not hesitate to do so. In the event that it fails unexpectedly while you’re waiting, try to get it repaired, or buy a second-hand replacement, even if it doesn’t meet the ideal specifications. But beware of the second-hand market, which has also skyrocketed its prices.
- If you have a maintenance contract for electronic components for your company, congratulations! You will be enjoying a service with a fixed cost probably before the pandemic, and the service company will bear the additional costs.
Remember that we are always at your disposal to advise you and solve your technical questions.