The Semiconductor Shortage
The shortage of semiconductors (the chips that help everything from cars to toasters to function), has been a persistent snarl in the supply chains for electronics.
The issue was supposed to work itself out as post lockdown manufacturing ramped up, but consumers are still finding it tough to find items like games consoles and smartphones. Instead of fading, the chip problem is on track to outlast the closures that triggered the shortage in the first place.
So, when might you be able to get your hands on that PS5? Here's the breakdown.
Demand
At the beginning of the pandemic, sales of desktops, laptops, smartphones, and other work-from-home devices shot through the roof as offices became uninhabitable. Sales of game consoles also exploded as people were looking to fill their free time.
Production of semiconductors for other goods, particularly cars, initially went down as people didn’t need them early on in the pandemic, but demand recovered more sharply than expected and manufacturers suddenly had to start ordering large amounts of chips again.
Even after the reopening of society, demand for products that require chips continues to rise, and with Christmas approaching, there’s little indication that this appetite for electronics will abate anytime soon.
Building New Factories
A number of chip companies are breaking ground on new facilities to increase their manufacturing capacities. The completion of these projects will be key in ending the shortage, and whilst it is unclear when exactly production will start, experts are hopeful that the issue will start to alleviate by the second half of 2022.
Equipment and Material
In a catch 22 scenario, many of the physical objects needed to actually make semiconductor chips have been in short supply as well. Circuit boards, in particular have been hard to come by and, as there are only a limited number of companies that make such highly specialized equipment, there are lengthy lead times.
All in all, industries expect a recovery on the microchip shortage by 2023, but sadly, it will be around for a little while longer yet.
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