Last year the global health crisis hit the tech industry right away with a laptop shortage. Now it has led to a chip shortage. And that, in turn, is affecting everything – including the PS5 and the auto industry.
The Chip Shortage
It’s the good and the bad of the effects of the pandemic on the tech industry. The rush of remote work and remote learning led to many people snatching up available laptops.
Additionally, because they were spending such additional time at home, the public bought all sorts of other tech, too. Along with laptops, desktops, PCs, and monitors flew off the shelves.
Last fall, the boon reached leisure time. Streaming devices, gaming consoles, smart TVs, smartphones – all of it. People seemed to be pacifying themselves with gadgets.
But it also brought a negative impact right away. Apple traditionally releases its new phones in September, but in 2020, they were delayed a month because of the chip shortage.
Most electronics firms buy their chips from AMD and Qualcomm. Both noted recently that they were experiencing shortages.
This certainly wasn’t news that Sony wanted to hear. They just released the PlayStation 5 last fall, and it’s much in demand. Sony can’t meet that demand and is blaming the chip shortage.
Automotive companies are also placing blame on the chip shortage. GM is extending production cuts in North America until the middle of next month. Previously, Ford and Fiat Chrysler had already informed investors of a slowing of production, blaming it on the chip shortage.
What Lies Ahead
The worse news, at least for consumers, is that it’s not going to improve anytime soon.
Remember that there’s already a chip shortage. But the semiconductor Industry Association said in December that global sales for chips would grow 8.4 percent this year. Last year it was a $433 billion industry. It’s one area of the economy going in the right direction. Growth the year before was at 5.1 percent.
And truthfully, there was already a greater demand for chips. The industry was troubled the past few years because the former president of the United States created a trade war with China. The U.S. placed sanctions on the biggest foundry in China, which caused it to have a difficult time selling chips to companies connected to the U.S.
Because the tech world relies so heavily on semiconductors, it means the chip shortage will cause the industry to remain in flux for some time.
Looking to learn more about mobile hardware? Read this guide to get it all figured out.
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