Microchip shortage: why there is a semiconductor crisis and how it can affect you

They are mostly unseen, but computer chips are at the heart of all digital products around us. And when supplies run out they can stop manufacturing.

 

There was a hint of the problem last year when video game players struggled to buy new graphics cards, Apple had to stagger the launch of its iPhone, and the latest Xbox and PlayStation consoles couldn’t keep up with demand.

 

Then, just before Christmas, it became known that the resurgent auto industry was facing what one insider called “chip Armageddon.”

 

New cars often include more than 100 microprocessors, and manufacturers just couldn’t get all of them.

Since then, one tech company after another has warned that they also face limitations.

Samsung has reported problems fulfilling orders for the memory chips it makes for its own products and those of others.

 

And Qualcomm, which makes the processors and modems that power many of the major smartphones and other consumer devices, has the same problem.

 

The impact of the pandemic

Like many other things that are wrong in the world, the coronavirus is partly to blame.

 

The locks boosted sales of computers and other devices so that people could work from home, and they also bought new devices to fill their free time.

 

Meanwhile, the auto industry initially saw a big drop in demand and cut its orders .

 

As a result, the chipmakers changed their production lines.

But then, in the third quarter of 2020, car sales rebounded faster than expected, while demand for consumer electronics continued unabated.

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