Computer chips have a supply shortage and a high demand

Computer chips have an intense rise of demands, and manufacturers could not keep up. Semiconductor companies like Qualcomm and Mediatek have asked their customers to kindly wait for new chips to arrive, as they try to produce as many chipsets as they can.

The sudden rise of demand and shortage of supply of these chipsets caused them to also have an increased price. That’s just how the law of Supply and Demand works. There are also delays from these semiconductor companies to file orders to different computer/phone manufacturers like Samsung. If these problems continue, consumers may be delayed in getting new devices, and even automobiles.

According to Global Times China, the situation may not improve until Q4 2021. The situation not just affects phones, but also automobiles and computers.

Ford was forced to close a facility last January, due to a shortage of semiconductors, and has halted a one-month production in one of its plants in Germany, which comprises of at least 5000 workers.

The situation worsened when the pandemic hit, as well as the rise of 5G. When the pandemic was set in and nearly everyone was forced to work at home, the demand for computer chips have risen significantly. There was a surge.

Industry leaders were struggling to keep up with demands due to closing down their factories. Computer chip manufacturers are already running full steam and cannot compensate further with building more factories (short note, Bloomberg is blocked on a paywall, so you might not be able to read the article), as per a report from Bloomberg.

Even with chipmakers that do well, such as Taiwan Semiconductor Manufacturing Company, which supplies chipsets to Apple, could not keep with the intense rise of demand, as there is not enough supply to boot.

Smartphone companies like Apple are willing to pay higher for the chipsets, however it does not mean that the supply will regulate, as Apple had supply problems with its 5G chips that powers up the iPhone 12. With the continuous supply loss, companies could lose $61 billion.

SOURCES: Business Insider, Global Times China