Due to ongoing supply chain issues resulting from the COVID-19 pandemic, there has been a highly publicized computer chip shortage in 2021 that has impacted over one hundred countries and the technology industry as a whole. In this article, we will explore this development and discuss the implications of ongoing computer chip shortages in global technology markets.
What are Computer Chips?
Computer chips, also known as semiconductor chips or integrated circuits, are fundamental components of modern electronics. These small pieces of hardware can be found in everything from kitchen appliances to smartphones to automobiles, making them a vital part of everyday life. Integrated circuits are manufactured in specialized facilities that use sophisticated materials such as ultra-pure water.
Background of the Computer Chip Shortage
Starting in late 2019, increasing concerns over the spread of the COVID-19 pandemic lead to a number of manufacturing plants closing or reducing capacity in response to public health measures. In 2020, the issue was compounded as the rapid increase in work-from-home and remote learning demands lead to additional consumption of electronic devices.
In 2021, Taiwan experienced a record drought, leading to a shortage of the ultra-pure water used in computer chip manufacturing. To further compound matters, a global shortage of tin metal stocks due to shipping difficulties and high demand has lead to a lack of the raw materials necessary for the manufacture of computer chip components. All of these factors have combined to create the present situation: an industry-wide shortage of computer chips, which some expect to last until 2023.
Impact of Computer Chip Shortage
As a result of the shortage, a number of industries have been adversely impacted. One notable example is the automobile industry. As modern cars contain sophisticated electronics, integrated circuits are a vital component in the manufacturing process of new cars. The global shortage has led to car manufacturers being unable to complete the production of specific cars, resulting in further supply chain issues down the line.
Another industry that has been impacted significantly is the video game industry, as video game consoles require integrated circuits. This has led to video game consoles to be more difficult to acquire as well as shortages in related hardware such as graphics cards. Combined with an increased demand from cryptocurrency mining efforts, graphics cards have become yet another rare item during the current shortage.
It is unclear how or when the computer chip shortage will end. As global supply chains continue to grapple with the COVID-19 pandemic, it is difficult to predict how the situation will evolve over time. Until the situation improves, the computer chip shortage will continue to be an issue.