If you are still waiting for your favorite laptop, smartphone, or even GPU to come in stock, then don’t worry you are not the only one in this situation, the problem lies in the shortage of semiconductor chips.The shortage of semiconductor chips has not only affected the tech industry but only the lives of millions of people who are in a dire need of affordable and efficient tech to go on about their daily lives.
WHAT ARE SEMICONDUCTOR CHIPS AND WHY ARE THEY IMPORTANT?
Semiconductors are small silicon-like chips that are made up of transistors, wires and are packed in just like a wafer. From your smartphone to your car, semiconductor chips are used everywhere in this modern world. If you are wondering how they are used in cars, think about power steering and all the entertainment options with advanced GPS you get to use in your car.
The shortage of chips in the automobile industry was so bad that GM motors had to halt their production of cars. Just because they didn’t have enough chips to provide in their new cars.
WHAT’S CAUSING SUCH A SHORTAGE IN SEMICONDUCTOR CHIPS?
Well, the answers simple. It’s you!
Yes, it’s the people. After the COVID19 pandemic hit, the world went into lockdown and suddenly everyone wanted a new computer, smartphone, tablet, and many other things that you can name!
This created a sudden surge in consumer demand in the tech industry which was not expected at all.
Suddenly everyone started attending online meetings, classes and playing online games more.
The demand for consumer electronics, along with viable software for video calls and meetings, was in such a high demand that companies such as ZOOM and Microsoft had to revamp their data centres to match the global demand.
Even companies such as STEAM, a video game digital distribution service by Valve, experienced a huge surge in the number of concurrent users from a little more than 5 million to almost 25 million during the pandemic. And still, poor crypto miners are blamed for everything as usual.
WHO MAKES SEMICONDUCTOR CHIPS?
One of the major manufacturers of semiconductor chips is TSMC short for Taiwan Semiconductor Manufacturing Company. TSMC is the world’s largest manufacturer of semiconductor chips and enjoys a comfortable market share of 56%. Other major manufacturers include Samsung, Intel and Qualcomm. This has led to the race in semiconductor chip superiority where various governments around the world are investing heavily in developing their semiconductor industry.
According to a senior government official, the Indian government is planning to give cash incentives worth more than $1 billion to each company that will set up chip fabrication units in India. Recently the Chinese government has also committed to investing $1.4 trillion to develop its domestic semiconductor chip by 2025. Even under Joe Biden’s administration, the US has pledged to invest around $50 billion to develop its domestic semiconductor industry and curb its reliance on other markets for semiconductor chips.
WHAT THE FUTURE HOLDS?
While it’s expected to take another 18-24 months before everything comes to normal, there’s also a problem of supply chain and alleged hoardings that may lead to an oversupply of semiconductor chips once the COVID19 pandemic is over.
While this race for semiconductor superiority will continue along with the shortage of semiconductor chips for the next few months, the consumers are the ones who will be hit hard by this. Unless the companies ramp up their production or find an innovative way to address this issue.