In 2020, Apple had to delay the release of its iPhones, while car manufacturers have been quite powerless in sourcing chips for new cars, which usually contain more than 100 processors each. Ford, Nissan, and Volkswagen have all reduced production this year. Networks being upgraded to 5G worldwide also adds to the demand for chips. Samsung cannot make enough chips to supply themselves, let alone fulfill orders from others. Qualcomm, the largest maker of smartphone processors and modems, also has issues meeting demand. The entire electronics industry is struggling with poor access to chips.
The shortage also includes screens and display components for the iPad, according to Nikkei. Apple usually has a tremendous ability to negotiate capacity and get new manufacturers and suppliers up and running. The shortage is said to have caused Apple to delay some orders from the first to the second half of the year, and Nikkei notes that the component crisis has now grown so big that even Apple – so powerful in procurement – can’t avoid it. So far, the shortage has not affected iPhone production, but sources tell Nikkei that the situation is “quite tight” there as well. Apple declined to comment on the rumors.
Samsung has also said that the lack of components could be an issue for them, especially from April to June. Koh Dong-jin, the Chief Executive, said in March that they were doing their best to increase production of mobile phones with flexible screens but still couldn’t meet demands.
Bloomberg recently wrote that one of the components that present problems is the chips that drive the displays – a component that usually doesn’t cost more than a few dollars, but which is still essential because it is the chip that makes your screen light up.
I have never seen anything like this in the past 20 years since our company’s founding, every application is short of chips. said Jordan Wu, co-founder and chief executive officer of Himax Technologies Co., to Bloomberg. The shortage is said to have led to a considerable increase in the prices of LCD panels for TVs. Thought demand would fall, instead, we ended up shopping like never before.
Coronavirus is partly to blame, like a lot of issues happening around the world. The sales of games, computers and other devices soared during the lockdown, and people bought technology like never before from their home offices through the lockdown. A wish to avoid public transport also led to great demand for new cars, and for bicycles, especially electric bicycles. They purchased better computers and bigger displays so they could work remotely. They got their kids new laptops for distance learning. They squandered on 4K televisions, game consoles, air fryers and immersion blenders to make life under quarantine more tolerable.
Another reason causing this high demand is the much better performance of new chips and graphic cards, which improved 35%-90% over the previous generation. A lot of gamers want to enjoy new games that would cripple their old graphic cards and chips without the latest powerful innovations.
To prevent the future chip shortage, Intel plans to make chips for other companies and spend $20 billion on expanding its semiconductor fabrication plants in Arizona. TSMC is ready to invest $100 billion in the next three years to boost its capacity. It will take time to solve this crisis, as it will still take several years for them to complete their commitments and be in operation.