The Global Chip Shortage: Where are we now?

IT News

As a consequence of the pandemic, the global chip shortage is still causing delays to a whole host of industries, spanning from Automotive & Gaming all the way to Healthcare.

Two years later, the world is still trying to recover from the shortage of computer chips due to a surge in remote working and reliance on technology following COVID-19 restrictions. As well as this, chip production facilities (otherwise known as fabrication plants or ‘fabs’) were shut down due to local restrictions and staff illnesses. The result? A mass discrepancy of semiconductor chips between demand and supply, causing severe delays. According to yahoo! finance, “the semiconductor shortage touches a mind-blowing 169 industries in some way”.

…the second half of 2022 is when we will start to see improvement

Chuck Robbins, CEO of CISCO

For further context, each chip can take up to 4 months to make and can only be produced in a specialised fabrication plant that costs around £12 billion to build (ASML.com). As well as this, South Korea & Taiwan are the largest producers of chips in the world, and with international shipping delays due to shortage of drivers and natural disasters such as the Suez Canal blockage, transportation of the chips has also caused delays (WGBH Educational Foundation 2021).

How will the global chip shortage affect small businesses in Kent?

BCS have worked closely with vendors to introduce short-term solutions for our customers amidst the huge delays for equipment, such as Wireless Access Points, Docking Stations & other Network Hardware – including providing loan equipment, to minimise downtime, whilst waiting for shipments to arrive. We would encourage Kent based businesses to order any hardware they might need well in advance, and to keep spares of critical hardware in stock, to ensure business disruption is kept to a minimum.

When are things likely to go back to normal?

Our purchasing team are keeping informed on stock levels and are updating customers accordingly. It is reported that waiting times are very fluid, with some component availability being delayed until 2023, depending on the industry (techwireasia.com). In the long term however, Intel has invested 20bn to build a new chip fabrication plant in Ohio, which is expected to be operational by the latter half of 2024.

Looking for advice?

Has the current chip shortage caught your business unaware? Looking for a partner that can help you with your overall IT strategy and contingency planning for situations like this? If so, we would love to speak with you about how we could be of service – simply fill in the form below and an IT expert will be in touch!