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Shortage of components, delays and causes

Still couldn't get your hands on your Playstation 5 due to the shortage? Graphics cards have become scarce and even Apple is planning to reduce production of the iPhone 13 despite the high demand. But where does this worldwide chip shortage come from and what exactly does it mean?

The Covid-19 pandemic is partly responsible for the shortage of electronic components and especially semiconductors. These are the famous electronic chips that you find in all your devices, from your car to your game console, your bank card or your smartphone. Basically, they store data and transmit information to other components to make the device work.

What does this have to do with Covid? Remember the various confinements the world has faced... Well, that creates an increased demand for electronic devices. This is especially the case if you have been telecommuting. But also consoles to occupy your days and evenings at home. And so on. A growing demand while the production plants were slowed down because of the health crisis. Mechanically, the balance of supply and demand was not there. And the economic recovery is still not catching up. That's why the playstation 5 or Xbox One X are only available in very small quantities for example.

So even Apple had to reduce the production of iPhone 13 despite the demand. And must even consider an A14 chip engraved in 5nm instead of 3nm because TSMC would not be able to keep up with demand …

  • Outsourcing, 5G and Huawei :

Another concern in addition to the decline in chip production is that all factories are based in China. At a time when trade is very limited, again because of Covid. Will companies consider relocating factories to Europe or the US? Only time will tell.
Do you have a 5G smartphone like the iPhone 12 or Samsung Galaxy S21 and can't wait to enjoy it? The rollout of 5G is also causing a shortage of microchips because, remember, they are everywhere!
And don't forget the war between Huawei and the United States. The Chinese giant has seen its phone sales fall sharply and had to launch its own operating system harmonious because deprived of Android.

But to compensate for the ban on using components whose companies are in partnership with the USA, Huawei has carried out a massive stockpiling of electronic chips. The time to find an alternative. This is particularly the case for TSMC chips used in 70% of devices.
Graphics cards are also in crisis! In addition to the shortage of components, it is the advent of crypto-currency that is at fault! To mine crypto currencies, miners have thrown themselves on it... And the prices are soaring. You want to change your computer? It could also be a problem to find a PC with a proper graphics card. So it's time to change your PC battery or Mac battery instead of buying a new machine.
And unfortunately, we talk about it less, but the production of telephone parts is also part of the collateral damage. With suppliers having unusually long lead times on certain components.

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