As many may have come to realize the past year and a half, popular consumer electronics and electronics parts have become exceedingly expensive or difficult to even find in stock. These include not only Nvidia’s current line of 30 series graphics cards that have been hard to access ever since release, but also their older products from previous years. The new next-generation gaming consoles released over the holidays last year have also been difficult for the masses to have access to, apart from some lucky enough to get one reselling it for way above MSRP to make some cash from people desperate enough for the consoles. All this is due to a severe lack in the production of computer chips during the pandemic season; in combination with a much higher demand for them than ever seen before as well, the chip shortage is no joke.
The supply and demand of semiconductors
As a result of the pandemic, the production of semiconductors has fallen to the dirt all the while demand for them as skyrocketed past expectations as society is stuck at home needing new tech to entertain themselves with all the free time they now have, or to start working or attend school from the comfort of their bedrooms. Semiconductors have quickly become a vital part of society as a whole, considered “the world’s fourth-most traded product counting imports and exports, after crude oil, refined oil and cars,” according to The Wall Street Journal.
PC enthusiasts have experiences shortages in certain markets in the past, making it a bit more difficult to build a full computer from scratch without overspending. However, there had yet to be a case where nearly every piece of the puzzle when it comes to building a computer is lacking in stock and prices are through the roof. The scale of the current shortage is far larger than what is commonly seen, and the demand has only gone up as we rolled through 2020 and into the first quarter of 2021. The demand is so high for PC parts that older parts have also been affected, being sold at higher prices, some even higher than what they were originally priced at when released. This includes my own computer and its parts, a 2060 Super from Nvidia once retailed for $400 but can now be found on sites such as eBay for twice that. My CPU is currently available on eBay and Newegg for the same cost that I had bought it for over two years ago.
The shortage in GPUs and some CPUs also has the increased popularity in cryptomining, which benefit largely the more processing power a computer has. Some rigs designated to mining for cryptos such as Ethereum are powered by dozens of high-end GPUs, just meaning less are available on the market for others to purchase for their needs. Scalping bots have also become prominent over the past year, who immediately purchase PC parts the moment they are back in stock so that the person using the bot may resell them for a large profit. These two issues coupled with a generally slow production process compared to past years make it terribly difficult for the everyday consumer to access PC parts they may need.
President Biden’s infrastructure proposal
The President’s infrastructure plan includes $50 billion towards the US semiconductor industry as the CNN explains production plants for semiconductors have become a focal point of economic recovery. The question, however, is if that much money is even enough to bring the industry back on its feet. The current largest semiconductor manufacturer is based in Taiwan is in deep waters as they worry about the resurgence of a new Covid outbreak resulting in another significant hit to production. Analysts say the chip shortage could last us well in 2023, according to Lynnwood Times, meaning the $50 billion investment would most likely not be enough to hold us over, even if Biden’s plan were to be immediately passed and put into effect.
Computers and consoles aren’t the only affected market
The automotive industry has also taken a hit, probably the worst out of all other markets the past year, and home appliances may soon see shortages in supply as well, The Verge says. Many companies expected to be back in full swing by the time summer rolled around, but as we reach the middle of August, things are not looking promising. Although the PC market is suffering from lack of semiconductors due to consumers wanting as much high-end performance as possible, the automotive industry makes use of older, and therefore cheaper to produce, semiconductors in vehicles as they do not require massive updates year after year. However, due to the chips inside vehicles being much older, there are less factories currently producing them. The same article from The Verge continues to explain that car companies must now invest either in new technology for their vehicles, or into factories that produce the specific older chips that their vehicles use, both of which will drive up the manufacturing cost, and therefore the cost to the consumer as well.
Multiple car companies that you may know and love are already preparing for the worst, such as Subaru, who temporarily shut down their plants last month as “part of the production adjustment due to shortage of semiconductors,” as a Subaru spokesperson told US News. Another car manufacturer that has been hit hard is GM, who have made the move to remove features from their upcoming line of cars including engine start/stop and cylinder deactivation, and now also wireless charging pads for mobile devices. This is expected to stay the case for the rest of the models to be released and sold this year, according to GM Authority.
Especially with the holiday season already only a few months away, crunch time is around the corner and it is possible that we end up in a more dire situation than we are already in. It seems as though the only truly effective solution to the chip shortage is time, the situation will likely get worse before it gets better, but eventually production will be back on track and the impressive demand there is now will normalize.