Global chip shortage: Here’s why it’s happening and how it affects you

Last year, talk of a global shortage in semiconductors began doing the rounds, following a surge in the demand for these little microchips that can be found in a host of electrical goods we use every day. Used in everything from cars to smartphones and even electric toothbrushes, these little pieces of electronic genius are often called the “new oil”, with some experts estimating that there are now more than 10 billion chips in daily use around the world.

Also referred to as semiconductors, there has been a global shortage of these chips, caused by a range of factors. Among others, the supply chain was interrupted due to factory and port closures as a result of COVID-19, and the pandemic-induced surge in demand for electronic devices containing these chips – this, at a time when the demand for chips was already exceeding the available supply.

The leading smartphone and PC manufacturers have noted the shortage’s effect on their supply and latest releases, with Apple’s iPhone 12 Pro initially being released with a three-week waiting period in place, Samsung saying that the chip shortage may lead to a belated release of the latest version of their Galaxy Note device, and Xiaomi already reporting a 4.6% decline in smartphone shipments, compared to the previous quarter’s figures. If you’re a gamer, you will have heard rumours of a shortage in gaming consoles – Sony, for example, has been struggling to keep up with demand for the PS5.

While this issue seems to be a quintessentially 21st-century problem, there have been instances of chip shortages before. The world experienced chip shortages in 1988, 1994, 2000, 2004 and in 2011, following the devastating earthquake in Japan.

As even more devices become a part of the internet of things, the number of semiconductors that are in being used globally is likely to be double the number of people on earth very soon. In the meantime, as we adjust and supply chains catch up to demand – something that those with knowledge of the industry say is likely to remain a problem for at least the next two years – keep in mind that delivery of the electronics you are looking for may be delayed. If you’ve wanted to try out alternative brands and smartphone models, this is a great time to broaden your horizons and give other leading manufacturers a chance to show their tech prowess.


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