Should You Be Worried About The Serious Chip Shortage In 2021?

Chip Shortage

Chip shortage has replaced other methods and devices of storage that were used traditionally by electronic devices and vehicles. Now, a chip takes less space, it is compact, portable and also provides more space than other traditional devices used for data storage. 

Chips and microchips are also being used in modern cars and have different uses like a chip can act as a semiconductor in cars which acts as the key components in the car’s infotainment system, power windows, touch screens, music systems, remote key modules, and many other systems. These are usually found in modern and updated cars instead of traditional ones. So it is more likely to be present in the newer versions than the older ones. 

Why is There a Chip Shortage in 2021? 

Before we move on to the chip shortage 2021, let us discuss briefly the role that these chips and microchips play. These tiny technological marvels are used to store data inside them and consist of many transistors within them. The transistors act like tiny little gates that regulate the entry and blockage of the electrons through them. 

Thus, these tiny details of tiny transistors within the chips require a great deal of work. The new IBM chip for example is packed with 50 billion transistors inside it and the space is just not more than two nanometers which if converted in layman’s terms is about a finger-sized space. 

Notwithstanding the size of these chips, they form the backbone of all the activities we can do today. The need for these chips is crucial in today’s time and the chip shortage in 2021 has put all companies, organizations, and consumers in a tough spot. 

The chip shortage, especially the computer chip shortage has affected every aspect of society and affected everything. 90 percent of the world’s electronics that went through China’s airports were stopped due to the COVID and thus adding more to the shortage during these periods. 

Will There be a Car Chip Shortage? 

As the technology grows, chips and microchips are being used in many devices other than cars like washing machines, water filters, smartphones, etc. These chips are known as semiconductors and modern electric devices rely heavily upon them for their seamless functioning. Currently, the demand for chips has gone way too high and its manufacturing is still on a very low graph as compared to the current increasing demand for it. Due to this, a chip shortage has been created in the tech market as chip manufacturing is not enough as per the industry demand. 

The consequences of this have also been manifested in the market and the sales pattern. Consumers are finding it hard to even buy a ps4 console because the company cannot acquire enough chips from the manufacturers due to chip shortage. Even big companies like Toyota, Volvo, and Ford have pulled a temporary pause in their manufacturing and production because of the chip shortage. 

Similarly, smartphone manufacturers have also started to feel the pinch of the current chip shortage. Apple has even warned its audience that the present chip shortage can lead to a great change in the sales of the iPhone. This means that the sales of iPhones will be reduced in comparison to the sales made by Apple last year. 

It is quite surprising that there are companies that are not affected directly and did not even have a direct connection with the chip storage that are facing severe consequences. A US-based company called CSSI, which is a dog grooming company has also started to feel the effects of the chip shortage, and thereby it has put a halt to its business too. Even consumers have faced this problem and have to resort to buying second-hand cars instead of the new ones. 

If you are looking for a clear-cut answer for the cause of chip storage then it is quite not possible. Many reasons happened and if you club them together, they become collectively responsible for the chip shortage 2021. Three major reasons that can be attributed to this shortage are: increase in demand, bad and inadequate decisions, and bad luck. Bad luck because no one foresaw the arrival of COVID in 2019 and 2020 and its continuation in the year 2021 as well. This is something not in the hands of man and woman, therefore one cannot control it, but at the same time, it has played a major role in the overall manufacturing and production of the chips. Therefore, it falls under the bad luck category. 

Updates on the Resolution of The Issue

Everyone is working towards it as it is inevitable that if shortage increases the world might go into complete recession and without activity. The companies that are not even directly connected to the usage of chips have started to feel the loss already. The CEO of chipmaker STMicro has estimated that the car chip shortage of 2021 could end by 2023 only if the correct measures are taken by the authorities, otherwise, it is estimated that it could last longer. 

Another CEO of automaker Stellantis claimed that despite all the efforts this chip shortage will easily drag through the whole of 2022 very easily due to the intensification of 2022. The average estimates of all other experts too also indicate the same thing: that the shortage could easily last up to 2 to 3 years. 

Another estimate also shows that once the demand goes down, they can also gear up with sales and production. Seeing this, it is anticipated that the demand will also go down by 9 to 10 months. All one can have is patience to get through the current shortage situation. 

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