The global microchip shortage is expected to continue until at least 2022.
There aren’t enough chips to go around for all the technologies we use each day. With the semiconductor shortage impacting markets, it’s challenging to get everything from a PlayStation 5 to a new Ford vehicle.
It’s such a massive problem that even Foxconn (who supplies Apple) expects that 5G rollouts could get delayed because of this issue.
What Caused the Microchip Shortage?
It was the perfect storm of problems for the semiconductor and microchip industry. While COVID-19 shut down manufacturing facilities, a surge of consumer demand occurred because everyone stayed at home.
Political issues influenced the market, such as the trade issues that developed between the United States and China under the Trump administration.
There’s a deeper issue to consider. In 2000, the semiconductor industry had 30 companies that created integrated circuits. Once everyone discovered it was cheaper to outsource, only a handful of creators now exist. Even AMD uses a fabless model to outsource the manufacturing.
How Do We Solve the Problem?
Intel says that it expects to spend $20 billion to expand its production capabilities in Arizona. The company is also open to the idea of producing chips for other brands.
TSMC says it plans to invest $100 billion over the next three years to expand its capacity to meet the rising demand for microchips.
The fact remains that these investments will take time to materialize. That means it will continue to be a challenge to get the products you want in the next few months, especially if it requires a new chipset.
What these changes today will accomplish is better infrastructure for future demand surges. It should be easier to buy the next generation of electronic equipment in the coming years.