The Great Chip Shortage Saga

July 26, 2021

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According to the latest from industry experts, the global chip shortage isn’t abating any time soon given a supply shortage that could last until the second quarter of 2022. Miners aren’t feeling optimistic, opting to seek out ways to recycle used chips or use different materials than silicon (which might be an example of necessity breeding innovation). As a result, the chip industry could grow 21-25% in 2021.

But how did we get here?

It’s complicated. The reasons we have a shortage can be attributed to a whole host of factors, including perceived low ROI on the “legacy” technology, poor planning caused by order cancellations brought about by COVID-19 shutdowns, and increased demand caused by the WFH lifestyle and its resulting demand for more technology. The shortage has been felt most acutely in the auto industry, whereby carmakers aren’t able to access the necessary semiconductor technology to release new fleets, leading to a missed opportunity in sales, but more optimistically, less work for the salesperson.

Next squeeze?

Next up, smartphones. With the rollout of 5G and the promise of the best damn network of our lives, the shortage is causing some phone makers to hold off on new product launches, resulting in higher price tags on the phones consumers want.

According to Gartner, the analyst group that expects the shortage to continue, anything that contains a battery or a plug probably has a lot of chips in it and will feel the squeeze. Industrial, aerospace, military, wireless, and more industries will be affected. Until supply picks up as planning and prioritization steady themselves, prices will most likely go up.

Here are a few private chip manufacturers to watch: Chips Manufacturing, TSI Semiconductors & more!