A PS5 is nearly impossible to come by, your iPhone is back ordered, and a graphics card hasn’t been seen in months. Any technological device you attempt to locate appears to be out of reach. What is causing this? Global chip shortages have occurred as a result of a variety of circumstances, including the pandemic, geopolitical tensions, and, of course, some cryptocurrency.
Answer to What’s Making Gadgets So Hard to Get Right Now is complicated.
As Usual, Covid Is the Obvious Problem
It’s easy to forget most days, but every device you own—including the one you’re using to read this article—is comprised of dozens of highly specialised microprocessors manufactured by even more specialised manufacturers. Maintaining that process was already difficult, but when the epidemic struck in early 2020, it placed a metaphorical wrench in the very physical gears.
The rise of work-from-home opportunities has been connected with an increased requirement for additional gadgets. Tellingly, webcams quickly sold out as millions of people changed their meetings to video chats and desired something that looked better than the built-in webcams on their computers. Similar pressures to purchase new computers, phones, tablets, and headphones, among dozens of other gadgets, placed a strain on the supply of microprocessors. Simultaneously, demand for automobiles—which also require dozens of integrated electronics—declined in early 2020.
Microprocessor manufacturing plants do not operate on a whim. Due to the extremely specialised manufacturing techniques required for most chips, it might take weeks or even months to establish a workflow capable of meeting demand for certain parts. It takes time for a plant that was previously focused on mass producing touchscreen displays for new cars to shift its focus to creating iPad displays.
Simply put, it’s difficult to keep up with electronics demand even in a typical year, and 2020 was anything but typical. Additionally, the pandemic is not over. Taiwan had been relatively free of Covid instances until recently, but a rapid, exponential increase in cases might potentially generate “logistical problems” if the government does not have access to additional vaccines, according to a Taiwanese spokesman.
Taiwan manufactures more than 60% of the world’s semiconductors. In other words, Taiwan manufactures the vast majority of CPUs used in electronics worldwide. With increased demand for particular gadgets, a dramatic shift in the kind of equipment people require, and greater pressure to remain operating during a pandemic, shortages were inevitable.
Perhaps even more expected, semiconductor costs are beginning to climb in response to this increased demand. Not only is it difficult to obtain enough of some devices, but they may become more expensive in the near future. Which exacerbates the subsequent issue.
International Trade Relations Create Additional Difficulties
While deconstructing the complicated structure of international trade conflicts is beyond the scope of a single explanatory piece, what we can say for certain is that it is not just a matter of increased demand making processor acquisition more difficult. It has never been optimal for other countries to have the great bulk of the world’s semiconductor manufacturing concentrated on a single continent. And the United States, in particular, has not always behaved well.
President Donald Trump imposed limitations on Chinese manufacturer SMIC in late 2020, just before he left office. This resulted in at least one automaker relocating microprocessor manufacturing to Taiwan, further overburdening Taiwanese firms. In some ways, the action was a continuation of the Trump administration’s dispute with Huawei, which was itself a continuation of the US’ much more convoluted relationship with China’s worldwide economic position.
Taiwan is facing the worst drought in half a century, which adds to the strain on an island that houses two-thirds of global semiconductor manufacturing capacity during the worst global shortage of semiconductors in recent memory.
To make a semiconductor, dozens of layers of metal need to be cleaned with water.According to Jefferey Chiu, an electrical engineering professor at National Taiwan University, in a chip there are hundreds of billions of transistors and there are hundreds of layers of metal to interconnect them. Chiu says the surface must be cleaned again and again after every process.
Due to the drought, Taiwan’s authorities have limited the supply of tap water across the island. And in future situation can worsen.
According to a report published by The Financial Times, a Singapore-based electronics manufacturer Flex expects the current semiconductor shortage to continue at least halfway through next year and possibly into 2023. Manufacturers of semiconductors are making large investments in opening new factories, but the plants will take years to build, and it appears that the supply of semiconductors will remain constrained for some time.