Being in the tech industry, you can be affected in many different ways. PCSVoIP believes you can be affected by external factors like the inflation crisis or something internal like not having enough material to make your product. Since the year 2020, there has been a global chip shortage causing every tech company to be majorly affected. What are we going to do and how should we fix it you ask? Well, here are a couple solutions that are in the works.
What are Chips?
First off, let’s think about what chips are. When thinking of “chips” right off the top of your head, you may think of the delicious snack that may not be the healthiest option, or even using your chip to make a payment on your credit card. Well it’s definitely not the snack we all know and love. According to Phil Shepley of Easy Tech Junkie, “computer chips are small and are made of semiconductors that [are] usually composed of silicon, on which several tiny components including transistors are embedded and used to transmit electronic data signals.” If you are unfamiliar with tech, I know all of that just sounded like a different language. To explain, we use chips as one of the main components of most technology. If there’s a shortage, how are we to manufacture more products for the consumer?
Why are we running out?
The tech industry has been through a lot these past few years. Between covid and other financial trouble, the consumer has high demand for technology. Having to work remotely throughout all of 2020, the demand for technology has been higher than ever before! The automotive industry took the largest hit as electric cars have gained more popularity in the last couple of years. Chips are used in automatic vehicles as well, between sensors and back-up cameras; however when it comes to an all-electric make-up, more chips are required. Chips are everywhere in vehicles whether or not it’s automatic or electric. They are also in your everyday usage of your phones, tablets, and video game consoles. Imagine what had to happen for Playstation to release their groundbreaking console, the PS5. The demand is incredibly high and they’re super hard to snag. Maybe an effect of that is there’s not a lot of chips roaming around to make more the way they’d like to.
How are companies trying to fix the issue?
As we are sure it took some time to make a set list on how to approach the global chip shortage, companies have come up with great solutions to endure this difficult period of time. While reading about solutions, I guess you could say “less is more”. An example is the redesign of products, which can significantly “…reduc[e] a product’s number of parts [and] reus[e] [its] components….” One of the most important parts to create chips are semiconductors. Semiconductors are in the silicon of a chip, making them so small they could be microscopic. By reusing a chip’s components, less new material will need to be added, lowering the cost of manufacturing products. Another method of companies attempting to fix the shortage, is steering consumers in a different direction. According to “A Chip Shortage Recovery Guide”, is it mentioned that, “sales and marketing can play a critical role in responding to supply crunches [by]…steering customers towards the company’s more widely available products, either by raising the price of products hit by the shortage or…promoting the widely available ones.” Sales and marketing teams can go above and beyond creating a new direction to prevent shortages and improve the chip supply greatly if done.
What is the recovery time? Will the shortage end soon?
During my research, a lot of new outlets and articles have mentioned the shortage will soon be over, predicting the dates of the end of 2023 or beginning of 2024, which luckily is not so far from now. We hope companies will continue their methods and we will reach a new high of chips and chip products. PCSVoIP wishes the best to all tech companies!
Works Cited
“2020–Present Global Chip Shortage.” Wikipedia, Wikimedia Foundation, 24 Mar. 2023, https://en.wikipedia.org/wiki/2020%E2%80%93present_global_chip_shortage#:~:text=An%20increase%20in%20remote%20work,to%20the%20depletion%20of%20inventories.
Hanbury, Peter, et al. “A Chip Shortage Recovery Guide.” Bain, 28 Apr. 2022, https://www.bain.com/insights/a-chip-shortage-recovery-guide/#:~:text=These%20include%20reducing%20a%20product’s,has%20into%20silicon%2C%20the%20better.
King, Ian, and Gabrielle Coppola. “What Will Replace Silicon Chips in the next Generation of Evs?” Bloomberg.com, Bloomberg, 29 Sept. 2021, https://www.bloomberg.com/news/articles/2021-09-29/what-will-replace-silicon-chips-in-the-next-generation-of-evs?leadSource=uverify+wall.
Scott, Graham. “Why the Chips Are down: Navigating the Global Chip Shortages and beyond: Jabil.” Jabil.com, 2023, https://www.jabil.com/blog/global-chip-shortages.html.
Shepley Last Modified Date: February 17, Phil. “What Is a Computer Chip?” Easy Tech Junkie, 17 Feb. 2023, https://www.easytechjunkie.com/what-is-a-computer-chip.htm.
“What Is the Difference between a Chip and a Semiconductor?” Compound Semiconductor News, 30 Aug. 2022, https://www.csfusion.org/faq/what-is-the-difference-between-a-chip-and-a-semiconductor/#:~:text=Is%20a%20chip%20a%20semiconductor,such%20as%20phosphorus%20or%20boron.
