The price of laptops and network devices have increased in recent months; this is due to the chip shortage impacting the supply chain of electronic companies. This shortage will likely become worse before it is resolved, so if you are planning to acquire new computers or devices before the end of the year here is what you should know:
So why Don’t We Have Enough Chips For Cars And Electronics? There are currently not enough semiconductors to meet the world’s demand, and this issue will likely continue. This can affect your business in several ways:
Semiconductors And Their Crucial Role In Electronics & The Chip Shortage
A semiconductor is an electronic component that regulates electricity and reacts to heat, touch, and light. They are a critically important component; without a semiconductor, you cannot build most modern electronics such as computers and TVs. There are production facilities worldwide that create these semiconductors; the largest of them exist in the United States, Taiwan, Japan, and China.
The Semiconductor Shortage
Right now the world is suffering a major shortage of this component. The industry has been hit with a collection of bad circumstances over the last 18 months.
- 2018-19: Demand shoots up for smart devices and demand for cars and cellphones remains high. The rise of the “Internet Of Things” raises chip demand as well.
- Early 2020: Covid-19 Lockdown and Quarantine. Factories close and production stops.
- Later 2020: Manufacturers and production facilities reopen and experience a major surge of demand. Included in the demand surge are chipmakers themselves and production materials used in chip making such as steel.
- October 2020: A fire at the AKM production facility in Japan slows and temporarily disrupts their ability to manufacture semiconductors.
- Early 2021: Texas Winter Storm shuts down the power grid, blocks roads, and forces businesses to close including some chip manufacturers.
- June 2021: Drought in Taiwan leads to manufacturing issues at the Taiwan Semiconductor production facility.
- Summer/Fall 2021: Automobile manufacturers release new models that require the same chips in many computer monitors. This results in an even larger delay for chip manufacturing due to multi-industry demand.
Where We Stand
Chip makers that have had the ability to resume manufacturing have done so, but there are still several hurdles slowing down production:
- Insufficient workers
- Insufficient materials
- Insufficient order lead time
Other chip makers are still waiting on returning to their factories and cutting back production due to this. Without certain materials, manufacturing can not keep up. For example, General Motors had to cut its production of cars due to the availability of chips not meeting their manufacturing requirements. This shortage could cost the auto industry dearly in revenue.
The shortage has a major impact on automotive and manufacturing businesses, but the shortage of computers that comes along with this has a profound impact on all businesses. Lenovo, Dell, and HP have said they must raise their prices due to high demand and low chip supply.
However, Samsung and Intel both have plans to construct new chip production factories in Texas and Arizona. These production facilities will be great for the future of the computing industry, but these factories take years to construct and will likely not be able to produce chips until after 2024.
How The Chip Shortage Will Affect Businesses
The impact on the business world will be due to the fact that there will be fewer devices produced in the next several months.
There will likely be limited availability of:
- Networking hardware (firewalls, switches, etc.)
- Wi-Fi routers
- Desktop Computers
You will likely have to compromise for what is available rather than exactly what you were looking for and will likely be subject to an increased price point as well.
Our Recommendation: Purchase New Devices Now
There is already some shortage of laptops and network electronics, with delays up to 2-3 months. If you are planning on new hires, an office move, or a server refresh, plan on ordering your new equipment now. With extensive delays and low supply, you will need to in order to receive them on time. The chip shortage is still impacting supply chain operations all over the world, and it would be prudent to order the devices you will need in the future now to avoid the risk of not having the devices your business needs in the future.
If you have any questions or would like to inquire about upgrading your business’ IT, contact us today!