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The chip shortage has been bubbling underneath the calm consumer electronics surface for a while now and has reached global scales of considerable proportions. The reasons, which we will dive into, are numerous but ultimately boil down to companies turning to outsourced fabrication at the same time the entire world was struck with a pandemic. 

Off of the back of this poorly timed decision, the lack of semiconductors to go around has meant that some of the hottest new games consoles and computer GPUs unveiled are in production limbo. Sadly this means if you were looking to get your hands on a new PlayStation 5, Xbox Series X, or a high-end AMD or Nvidia GPU then unless you were an early bird you could be waiting a while yet.

Ford and GM truck production has also been halted, reliant on the same in-demand chips and Foxconn is hinting that they have part delays that could continue into 2022. They supply Apple with parts so iPhone production could be affected and with 5G rollout delays alongside Samsung have expressed concern describing the chip situation as being seriously imbalanced at present.

So it isn’t just gamers who will find themselves hindered. This could have a big impact on many facets of the electronic production industry.

As Chaim Gartenberg reported over at theverge the shortage is hitting now as the result of trickle-down delays that date back to the start of the COVID-19 factory shutdowns. With many consumers stuck at home during the lockdown, the demand for consumer goods skyrocketed. Many of us turned to work from home as a career solution and needed new laptops. Meanwhile, the political situation got difficult and trade wars with super-producer China were instigated at the hands of former President  Donald Trump.

The most pressing issue though, is that rather than an undersupply of chips there is a deficit of fabricators.“In the year 2000, we used to have 30 companies that made their own integrated circuits. Then, they discovered that it’s cheaper to outsource,” explains UCLA professor Christopher Tang in an interview with The Verge.

“So the need for chips is high but the industry itself has been downsizing incrementally”

The demand continues to rise, with many products becoming computerized that weren’t previously such as vehicles and newly developed smart home accessories that more and more of us are becoming reliant upon. So the need for chips is high but the industry itself has been downsizing incrementally. A lot of tech companies have opted to outsource their manufacturing to other companies such as Samsung or TSMC even chipmakers like AMD have shifted towards fabless importing the parts from elsewhere for convenience.

Fortunately, it will likely only be a matter of time in order to catch up and resolve the current chip shortage. Once the demand ceases to outpace the supply things should even out smoothly and it will be business as usual. So with luck, the endless digital queues for your new PS5 will eventually be a thing of the past.

That said, changes will probably need to be put in place in order to help prevent future shortages. The industry needs to take a long hard look at how it sources semiconductors. We live in an increasingly digital world and the demand for these tiny but vital parts is unlikely to decelerate. Fortunately, lots of companies are on the ball and we are starting to see their intentions come to light. TSMC for example is taking steps towards prevention by investing in its capacity spending $100 billion over the next three years. Intel is also looking at expanding its fabrication and plans to spend $20 billion on its Arizona location. The company is also going to start supply for other companies operating much like TSMC and Samsung already do.

Yet, changes like these will definitely take the industry some time and commitment to implement. In order to actually build a healthier supply chain, it may take not only several years but decades ahead. For the time being, buying some of the latest consoles and gadgets will likely be an online minefield to navigate with hoops to jump throughout the process. But if companies commit to the changes necessary then hypothetically a brand spanking new PS6 or Xbox successor will ultimately be an easier purchase when developers are ready to lay one on us.

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