Why the global chip shortage is not coming to an end any time soon

why the global chip shortage is not coming to an end any time soon

News of the global chip shortage has been so long this year, it has become a sensation. "I'm sorry I forgot to make the vessels, there's a global chip shortage." But as with a lot of online humor, there is the truth of the matter. The semiconductor chip crisis is real, and it has had a huge impact on our lives. Cars are more expensive and harder to build. Computer manufacturers are in a hurry to keep up with the growing consumer demand for remote work and school appliances. And countless results have been delayed, with release dates pushed as dominoes throughout 2022 and into the coming years.

While it's an issue that affects almost everyone, the chip shortage has been particularly painful for gamers. One year on from the release of PlayStation 5, it's still impossible to order one. . slightly longer cards.

As Forrester Analytics' Glenn O'Donnell tells Engadget, the issue is usually a simple supply and demand problem. You can point out several reasons for this: carmakers dropped their hardware orders at the outset of the pandemic, with the assumption that consumers would not be interested in buying new vehicles. . It is true that the opposite was not true - the huge demand for used car prices has skyrocketed. Chip makers also had to keep up with growing demand for PCs, game consoles and a wide range of devices while also addressing productivity slowdown amid COVID locks and steps other.

Xbox X and PS5 series

Aaron Souppouris / Engadget

"I would say that things have gotten better, but in fact they have gotten a little worse, and it's no surprise to me," O'Donnell said in a recent Engadget interview. In April, he said that the global chip shortage would continue throughout 2022 and into 2023. Now, it is even more certain that we will not see any major relief until then. While future chip fabs from Intel, TSMC and Samsung may push products, it will take at least two years from when these companies break down to where they go. Intel began construction of its two Arizona chip factories in September, which are not expected to be operational until 2024.

Basically, get used to chip shortages, because we suffer through it for a while. In an interview with Nikkei last week, Intel CEO Pat Gelsinger also confirmed that he expects the situation to last until 2023. "COVID disrupted supply chains, causing it to go negative," he said. at a news event in Malaysia, where the company was investing $ 7.1 billion in manufacturing and packaging lines. "Demand has exploded to 20 percent year over year and disrupted supply chains with a huge gap ... and that explosive demand has continued."

NVIDIA CEO Jensen Huang recently accepted that view Yahoo Finance interview, stating that he does not think there are any “magic bullets” in dealing with the supply chain. Huang also noted that NVIDIA's provider group itself is multifaceted and diverse, so the shortfall should not significantly affect the development of new products. But NVIDIA has also struggled to keep up with gamer requests even before the pandemic. Scalpers and cryptominers generally bought all available stock, leaving average consumers with little investment from stores and resale.

While Huang expects production to ramp back in 2023, he also believes the pandemic drive to buy more computers and game hardware is here to stay. "I think these are permanent situations, and we are going to look at building new computers for a long time," he told Yahoo. “People are building home offices, and you could see the consequences. ”

In the U.S., there is every hope that the Innovation and Competition Act (USICA), which includes $ 52 billion in funding for the CHIPs Act for America, could boost more semiconductor production. But after they passed the Senate earlier this year, the legislation has stalled in the House of Representatives, where Republican members have said they would block USICA. The bill also includes $ 190 billion towards the development of American semiconductor R&D, all hoping to become more competitive with China, which has significantly contributed to its chip production over the past decade. passed.

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