Effects of Chip Shortage Caused by COVID-19

When Covid-19 first hit everything went haywire. Many big manufacturers stopped producing their products, Including TSMC (Taiwan Semiconductor Manufacturing Co); one of the biggest companies producing semiconductors. This introduced a Chip Shortage issue, which is still plaguing us today.

Combine this with Scalpers and miners, a simple consumer can’t get his hands on a product they need without paying an awfully high price.

PC HARDWARE:

The biggest companies which are affected by this shortage are AMD, Intel, and Nvidia. There are a lot of other big motherboard manufacturers which are also affected but we are going to focus on these three today.

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AMD

AMD (Advanced Micro Devices) is the third largest Customer of TSMC. AMD was struggling to catch up with Intel before 2016. But in the December of 2016, AMD unveiled its Ryzen processors line, which was much better in every task as compared to their Intel counterparts. AMD’s new Ryzen Processors were based on TSMC’s  14nm platform which was codenamed “Zen”. But in November of 2019 the Covid-19 outbreak was discovered which put everyone on a halt which includes AMD and its chip producer TSMC.
People from all over the world want a new processor in their newly built PC, but the sad news is even though they have the MSRP money they still have to pay more money than it was originally launched.
AMD is not only a Processor company but also provides Graphics Processors Units (GPUs), which in turn makes them more affected by this Pandemic and the chip shortage issue which was caused by it.
Their GPUs can also be used in mining Crypto Currencies. So the miners rushed out to buy every GPU they could and caused even more havoc among average consumers.

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Intel

Intel is one of the leading companies in the Personal Computer World. They have been around since 1968. Intel was feeling the heat from its competitor’s new “Ryzen” processor line-up. So they started inventing new processors to compete with the Ryzen line-up. Intel used to produce its own chips but to compete with its competitor it had to get some help from Taiwan Semiconductor Manufacturing Company (TSMC), which we all know is still suffering from Supply-Chain issues. This caused Intel to lag behind its demand.

Nvidia

Everybody knows Nvidia, if you don’t then let me introduce you to one of the biggest Graphics Card or GPU companies in the World. Nvidia was founded in April 1993. Their only competitor is AMD (Intel is thinking of producing a GPU as well). Nvidia does not produce its own chips they do not own a chip manufacturing plant. They outsource their chips from Companies like TSMC and Samsung (Yes, That Samsung). The current best GPU from Nvidia (RTX 3090) uses a chip manufactured by Samsung. As all the current companies are lagging behind their supply-demand chain, but that’s not all, Nvidia GPUs can be used in mining cryptocurrency as well and the sudden jump in cryptocurrencies led to the day when miners were paying ridiculously high prices than the average consumer could, which encouraged scalpers who were happy to step in and buy all the stock which was hardly meeting the consumer needs.

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Will the chip shortage end?

Some of the early reports from 2021 stated that the chip shortage would be over by the end of 2021 but as we all know that’s not the case. While the COVID-19 pandemic has been successfully contained through the use of vaccines, the effects of this pandemic continue to be felt across numerous industries, particularly those that are dependent on semiconductors. As we move into 2022, we should be able to see a significant improvement in the supply situation. A unique situation exists in the semiconductor industry. It is constrained not by demand, but by the supply of goods and services. In the near future, it seems likely that there will be a period of oversupply in the area of auto semiconductors at some point during the year 2023. This is due to the current shortage of components.

Also, read Why Cyber-protection is crucial