Computer Shortages To Remain As Demand Overtakes Supplies
The truth that may be difficult for businesses and organizations impacted by the global chip shortage to face is that the supply situation is unlikely to return to normal before 2023, according to a heightened consensus in the semiconductor industry. Any chances of the supply of semiconductors returning to normal depend on significant improvements at fabrication plants.
Currently, many suppliers are rethinking their strategies in their best attempts to manage this ongoing shortage. What exactly is fueling this shortage of computer supplies? There is more than one side to this supply shortage. Two of the key factors impacting the shortage are the ever-changing demand patterns for products that require microchips and the operational inefficiencies within the semiconductor industry.
While capacity in the industry has always had its struggles, the severity of the 2021 shortage can not be underestimated.
What Is the Global Chip Shortage?
The shortage of computer supplies can be attributed to the global chip shortage. The global chip shortage is an ongoing crisis in which the demand is greater than the supply of microchips that are the driving force behind today’s electronics. These chips have been referred to as semiconductor chips, computer chips, semiconductor chips, and more. Regardless of the name they are referred to, manufacturers need more of these chips than are being produced.
These chips are in practically everything that has computing components, from cars to everyday consumer electronics. If a device has a screen attached to it, it is powered by one or more chips. The automotive industry was one of the first to experience a chip shortage. Dating back to the summer of 2020, new vehicles have been in short supply. The global chip shortage has taken place not because of issues with assembly lines, but because of the struggle to produce the modules that today’s technology can’t operate without.
These chips exist at several performance levels and are available within different price ranges. Chips that are able to operate at a high-performing level are placed in the latest computing devices and smartphones and are more complex than the chips that are used to power a smart TV. While some chips may be producing better results than others, the global chip shortage is affecting the majority of today’s industries.
What Is the Cause of the Global Chip Shortage?
The global chip shortage was propelled by the COVID-19 pandemic and the rising demand for electronics. Consumers and businesses started purchasing new computers and servers to support the transition to remote work and hybrid work environments. The automotive industry has also been a major player in the global chip shortage, following pandemic-related delays. Faster adoption of electric cars and demand for renewable energy also contributed to the shortage.
While global semiconductor sales declined between 2018 and 2019, sales grew by 6.5% in 2020. This accelerated growth has continued in 2021, and according to the Semiconductor Industry Association, sales for May 2021 were up 26.2% compared to the same time in 2020. The global chip shortage has hurt production at major companies like Microsoft, Ford, Tesla Inc., Apple Inc., etc. The amount of time it’s taking manufacturers to fulfill orders has been stretched to several months.
When more product manufacturers began putting in several orders for chips after the first wave of COVID-19 lockdowns, there were no longer enough chips to spread around. Due to the global chip shortage, many businesses canceled orders that were not being fulfilled, but this resulted in those businesses being sent to the bottom of the list when it was time to place a new order.
There still has not been enough capacity to create more chips to meet the surging demand. No one can build production sites fast enough to solve the shortage.
What Does the Global Chip Shortage Mean for Your South Carolina Business?
If you have not had too many conversations about the global chip shortage, this may all seem a bit overwhelming. What does all this global chip shortage mean for your business?
The supply chain bottlenecks stemming from the global chip shortage may have an impact on not just your industry, but your business operations. As a result of the global chip shortage, we anticipate a rapid increase in prices for electronics and equipment. The majority of businesses that have made it this far through the pandemic may not have any issues continuing normal business operations, but it is important that these businesses plan ahead.
It is not impossible to source new computers and other hardware. Due to the global chip shortage, most businesses just need to place their orders earlier than they would have needed to do a few years ago. If you think your business may need additional computer supplies by June 2022, you may need to place your order as soon as possible.
For businesses and organizations looking to upgrade a suite of computers, purchasing decisions will be influenced by availability rather than price. When you place your order many months ahead, if you encounter any issues with delays or the supply chain, there will still be enough time for your order to be fulfilled.
Servcom USA Can Help You Survive the Global Chip Shortage
If you are encountering issues with your computer and hardware supplies and you are not sure how long some of your hardware will last, now is a great time to be proactive and order the hardware replacements you need. If you wait too long to order replacements, you could encounter a major challenge during this global chip shortage.
Are you struggling to determine what hardware needs to be replaced? Do you know what needs to be replaced, but you are not sure when they need to be replaced? Could your business or organization benefit from managed IT solutions? Servcom USA’s managed network services and business continuity and data backup solutions ensure that your services and devices are not only available 24/7/365, but physically secure and fully supported.
We can help you navigate your way through the global chip shortage and ensure you have a plan to address any changes and upgrades that need to be made to your IT environment. Contact us today to schedule a strategic review of your current IT infrastructure.