The Global Chip Shortage Explained
It’s been months and you still can’t buy a playstation 5.. Not only that Samsung is raising concerns about chip shortages for its phones and Foxconn says that it might have part issues until 2022.. It’s not just tech companies either.
Car companies like ford and gm have also had to push pause on manufacturing, there’s a big problem with computer chips right now, there’s just not enough of them to go around massive worldwide chip shortage earnings being caught by up to 2 billion.
We don’t have these chips, we’re in trouble, there’s a lot of reasons why this is happening right now: slow downs from the kobit 19 pandemic, a spike in demand of laptops, gaming, pc parts and, of course, next-gen consoles, while everyone’s been stuck at home and lingering effects From former president trump’s trade war with china, it’s a decades-long problem, though that’s been building towards this moment.
Let’s take a step back in year 2000 we used to have around 30 companies. They make their own integrated circuits, but then they discovered that it’s cheaper to outsource. So, while almost every major tech company with one or two exceptions, says that they design their own chips, the reality is that the actual production is done by just a handful of companies, and we promised that the first mac with apple silicon would arrive by the end Of this year, well, that day is here so when apple says that it was making its own mac processors last year, that was technically true.
Apple does design those chips using designs it licenses from arm, but then it ships those designs off to other companies to build. In fact, sony apple, Microsoft, Qualcomm and Nvidia all use the same company to build their chips, tsmc or Taiwan, semiconductor manufacturing company and even intel, which is one of the few companies that does make its own chips has announced.
That it’ll also be outsourcing some of its more advanced manufacturing in the years to come. We are increasing our engagement with tsmc Samsung, global foundries and umc in real terms. What that means is intel’s been struggling to keep up with tsmc’s manufacturing techniques and that’s left it vulnerable to competitors like amd, which does outsource its chip manufacturing and has been able to benefit from those more advanced techniques.
Trump’S trade war with china further complicates things. On the one hand, it’s made it harder to work with Chinese chip companies putting a further strain on that supply. On the flip side, trump’s limitations on companies like Huawei from using us designs means less demand for chip manufacturers. Like tsmc, at least in the short term, meanwhile, global demand for chips is greater than ever. Time has changed, and also technology has changed. So now we’re no longer thinking a chip is using by a computer. It can have so many applications.
I think that to differentiate your products in the future, they realize that actually, the chip could be the key differentiating factor you’re, not just fighting against everyone else who wants to buy ps5 you’re fighting against everyone who wants to buy an rtx 3090, an m1 mac, a Qualcomm powered smartphone ford truck and more so now. I think that the pendulum is swinging back to the other side.
He said hey. Maybe we need to have some domestic supply chain such that in case of emergencies or disruptions. At least there is some capability within the domestic region. Intel is announced, they’re going to invest 20 billion dollars in Arizona at the same time also tsmc from Taiwan they’re going to build a facility in phoenix. I think that that is only the first wave intel also plans to start manufacturing, ships from other companies with interest from IBM, Microsoft, Qualcomm and Google, and adding another major semiconductor manufacturer to the mix, especially one that won’t have to deal with trade wars, tariffs or security Concerns from abroad could have a big impact eventually to build a semiconductor manufacturing facilities. It takes a long time intel or tsmc.
They are under the gun to create more capacity, but will take years to build a brand new facility, [ Music ]. But these changes are going to be a ways off and while they might help things down the line, the only real solution to this shortage might be time. So i think that the move that intel is making and also in terms of tsmc investing in phoenix is a good first steps. So i think that we are in the right direction, because i think that you look at the 5g rollout and the internet of things. So there will be huge demand for this kind of high tech in the long term.
This could be a catalyst towards a much more efficient supply chain for chips, possibly for other manufacturing too, which means that you’ll probably still have to wait a while before you can buy a ps5, but it could mean that you won’t have to wait as long before You can buy a playstation 6
Thanks so much for reading.
If you want to learn more about the semiconductor supply chain or when you can finally buy a playstation 5 check out our site. Gamezbook.com we’ll have tons more of good stuff.
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