One of tech\u2019s biggest problems in the past few months has been due to one of its smallest components: chips. Months into the shortage, the effects have spread far beyond the difficulty of buying an Xbox Series X or PS5. Car companies are being hit the worst, and even home appliances might start to see issues with supply. <\/p>\n
Earlier this year, companies expected to have supply chains sorted and products more consistently back on shelves by summer \u2014 but June is nearly over and there\u2019s seemingly no end in sight. And with the upcoming slate of big tech releases and the holiday shopping season coming up, expect things to get worse before they get better. <\/p>\n
\u201cWe had thought probably six or seven months ago, like everybody else, that it would be relatively short-term.\u201d Jahmy Hindman, chief technology officer at John Deere, commented on The Verge\u2019s Decoder<\/em> podcast. \u201cBut I think we\u2019re into this for the next 12 to 18 months.\u201d <\/p>\n It\u2019s not just tractors and trucks, though. Intel CEO Pat Gelsinger voiced similar sentiment, commenting in a Wall Street Journal<\/em> interview back in April that it could be two years before production is able to ramp up. \u201cThis will take a while until people can put more capacity in the ground.\u201d And AMD CEO Dr. Lisa Su noted at a May investor event that the company was being forced to prioritize its higher end chips over lower-powered parts due to shortages. <\/p>\n There\u2019s two different forces at work here. For some products, there\u2019s too much demand, which impacts the higher-end chips like the GPUs in a PlayStation 5 or an RTX 3080 graphics card. While chip shortages have undoubtedly played a part, there\u2019s also simply more people who want to buy these products than there are enough to go around. <\/p>\n Take the PS5, for instance, which is the fastest selling console in US history despite the continued difficulty in purchasing one months after its launch. \u201cEven if we secure a lot more devices and produce many more units of the PlayStation 5 next year, our supply wouldn\u2019t be able to catch up with demand,\u201d Sony CFO Hiroki Totoki said in a private analyst briefing, according to Bloomberg<\/em>. <\/p>\n Or take GPUs, which have finally started to drop in price over the past few weeks \u2014 not because Nvidia has magically figured out how to churn out more parts, but because demand is finally slowing down following plummeting Bitcoin prices and China\u2019s crackdown on cryptocurrencies. <\/p>\n It\u2019s in chipmakers\u2019 interests to keep trying to churn out those parts: newer chips are more lucrative. If you\u2019re TSMC or Samsung, it\u2019s in your best interest to focus on making (and expanding) those production efforts. <\/p>\n On the flip side, though, are supply issues, particularly for older chip designs. Unlike a new iPhone or Xbox, a Ford truck or a John Deere tractor doesn\u2019t need bleeding-edge chips using TSMC or Samsung\u2019s 5nm process. They use older chips, which are less powerful (and less pricey) than ones using brand new technology. <\/p>\n The impact here is already being felt. A Bloomberg<\/em> report from last month notes that carmakers are starting to skip out on offering premium features like navigation systems or extra screens in order to stretch their supply of chips further. Nvidia repurposed old GPUs into special cryptocurrency mining boards to free up more supply of newer ones for gamers. Even Apple noted that it was running into trouble getting ahold of those older chips, due to the extra competition. \u201cMost of our issue is on licensing those legacy nodes, there are many different people not only in the same industry, but across other industries that are using legacy nodes,\u201d Cook said in Apple\u2019s Q2 earnings. <\/p>\n Revathi Advaithi, CEO of Flex \u2014 the world\u2019s third largest electronics manufacturing company \u2014 noted a similar issue on Decoder<\/em> last month. \u201cAutomotive semiconductors have been pretty outdated,\u201d she explains, noting that automakers either have to invest in upgrading to newer technologies more on par with consumer devices, or foundries need to build out more capacity for those specific legacy chips \u2014 parts which aren\u2019t really useful for phones or laptops. <\/p>\n Exacerbating the issue is that on a broader scale, the semiconductor industry has become increasingly consolidated. Despite the increasing importance of computer chips in virtually every hardware product across multiple industries, the number of companies that make those chips \u2014 especially specialized chips at the high end of the market \u2014 have grown increasingly fewer in number. <\/p>\n TSMC alone accounts for 92 percent of the supply of cutting-edge chips, with Samsung providing the rest, according to a Wall Street Journal <\/em>report. The company also reportedly makes about 60 percent of the chips for car manufacturers around the world. Which means that when those companies run out of capacity, there\u2019s not a lot of other places to go to get those processors. <\/p>\n That\u2019s also why chip shortages likely won\u2019t hit some of the biggest devices, like Apple\u2019s next iPhone or whatever Samsung\u2019s fall flagship ends up being, at least not as hard as they hit Ford trucks or GPUs. Digitimes<\/em> reports that TSMC is already prioritizing Apple\u2019s orders (along with those of car manufacturers) heading into the fall. Because of the size and scale of Apple\u2019s orders \u2014 think of how many iPhones it sells every year, all using cutting-edge chips from TSMC \u2014 it has the pull to stay at the front of the line.<\/p>\n The bad news is that the crunch will probably get worse before it gets better. TSMC, Intel, and Samsung are all heavily investing in expanding and building new fabs. The Biden administration is also trying to help, pushing to pump billions into US semiconductor manufacturing. But as Intel\u2019s CEO noted, it\u2019ll take months, if not a few years, for those investments to mature.<\/p>\n And with the holiday season fast approaching and a new wave of products from across market segments all fighting for chips, there\u2019s almost certainly bound to be more product delays, cut corners, price jumps, and part shortages to come. <\/p>\n \n \n","protected":false},"excerpt":{"rendered":" One of tech\u2019s biggest problems in the past few months has been due to…<\/p>\n","protected":false},"author":1,"featured_media":1486,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[7],"tags":[59,38,57,61,58,60],"_links":{"self":[{"href":"https:\/\/itparadise.net\/index.php?rest_route=\/wp\/v2\/posts\/1485"}],"collection":[{"href":"https:\/\/itparadise.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itparadise.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itparadise.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itparadise.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1485"}],"version-history":[{"count":0,"href":"https:\/\/itparadise.net\/index.php?rest_route=\/wp\/v2\/posts\/1485\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/itparadise.net\/index.php?rest_route=\/wp\/v2\/media\/1486"}],"wp:attachment":[{"href":"https:\/\/itparadise.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1485"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itparadise.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1485"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itparadise.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1485"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Chips could be in short supply for years<\/q><\/aside>\n
Older chips \u2014 like the ones used in cars \u2014 are being hit particularly hard<\/q><\/aside>\n