To function, many basic electronics require semiconductor chips, a $5 miniature electric circuit that essentially functions as the “brain” of the product. But due to a temporary shutdown in production at the start of the Covid-19 pandemic, US sanctions on Chinese companies, along with other disruptions, there’s now a global shortage of microchips, which has now delayed production of everyday items, from cars to laptops.
The shortage of microchips has gotten so dire that President Joe Biden plans to invest $50 billion in semiconductor manufacturing and research as part of his American Jobs Plan announced in March.
But until microchip manufacturing gets ramped up, consumers can expect long wait times for numerous products through next year and even into 2023, according to advisory firm Forrester.
How long it will truly take to stabilize though, is anyone’s guess.
“There’s a shortage of microchips this year. It’s not just shortfall but severe shortage,” Lu Weibing, vice president of Xiaomi Group, a Chinese company that produces and invests in electronics, said on Weibo in February, the Global Times reported.
Below are eight products that require microchips to work and may remain elusive for consumers to get their hands on.
When the pandemic first hit last year, automotive manufacturers cut down on chip orders, believing that customers would hit pause on spending money, according to Bloomberg. Instead, demand for many chip-dependent products – including vehicles — soared, leaving car manufacturers unable to meet their customers’ needs.
Compounding the issue was the fact that chip producers had prioritized consumer electronics first and couldn’t fill orders for automobile companies.
As a result, the US is now expected to manufacture 1.28 million fewer vehicles this year compared to last year, according to the Alliance for Auto Innovation. Prices of used cars and rentals have increased. Manufacturers are so desperate that they’re currently building cars without semiconductors and are storing them until they get that final component.
Electronic dog-washing booths
Dog-washing booths, which, as the name suggests, wash and dry canines, are especially popular among dog-park managers and the U.S. military, according to The Washington Post. But anyone who wants a mechanism more involved than a hose to clean a dog, may have trouble getting it for a while.
CCSI International, a leading US dog booth manufacturer, learned in May that the typical chips that power their booths were unavailable. Potential alternatives would raise costs and require the company to tweak its product.
“This particular problem affects all aspects of manufacturing, from little people to big conglomerates,” CCSI president Russell Caldwell told The Post.
Caldwell added that the company’s rural location — Garden Prairie, Illinois — has also compounded the production delays. “Literally we have cornfields around us … there’s not a lot here.”
PS5/Xbox Series X
Being stuck at home for long periods of time, especially during the winter, drove up demand for video games during periods of lockdown.
The proof is in the numbers.
Sony’s PlayStation 5 sold roughly 7.8 million units from its November release through March, beating the PS4’s previous sales record in 2013, according to Push Square. Microsoft, the manufacturer of Xbox, doesn’t release exact figures, but confirmed that the release of the Xbox Series X in November was “the most successful” in the company’s history, Metro reported.
But both companies weren’t able to meet the rabid demand for the newest gaming consoles, due to the microchip shortage. Exacerbating the issue was the fact that third-party sellers swooped in, hoarded consoles and resold them at a significantly higher price.
The console shortage is likely to last at least through June, Mike Spencer, Microsoft’s head of investor relations told The New York Times. For Sony, the issue likely won’t be resolved even by next March, VGC reported.
Laptops and desktops
Shipments of laptops and desktops around the world rose at their fastest pace in two decades in the first quarter of this year as more people worked and studied from home during the Covid-19 pandemic, Reuters reported citing research from research firm Gartner Inc. The increased demand, coupled with the chip shortage, has translated into customers having to wait as long as four months to get a new PC, according to TechTarget, citing research from Gartner, an IT service company.
“Crucial components, such as displays, GPUs, and other smaller chips that drive PC internals, will face a squeeze for most of 2021 and well into 2022, leaving a significant amount of demand unfulfilled,” Rushabh Doshi, Canalys research director, said in a report.
The microchip shortage initially slammed automobile and video game manufacturers, but has now trickled down to cell phone companies, but it doesn’t appear to be as severe of an issue for these companies, though.
Apple, for example, manufactures its own microchips for its products, and was mostly able to sidestep production issues during the microchip shortage. But as of last month, the company was forced to postpone producing some laptops and iPads, but not iPhones, Fortune reported.
Samsung, both a manufacturer and user of microchips, wasn’t spared from production hiccups because it relies on third-party components too — such as processors from Qualcomm. The company delayed the release of its Galaxy A52 5G and Galaxy A72 in key markets due to production issues related to the chip shortage.
Still, because smartphones rely on a specific kind of microchip that hasn’t been as depleted as others, it’s unlikely that consumers will have a difficult time getting cell phones from the big-name brands, according to Android Authority.
However, smaller companies may struggle more, which could directly impact consumers. Those companies may release lower quantities launching a new line, leading companies to potentially raise prices to compensate.