The global shortage of computer chips is causing major headaches for American manufacturers.
The COVID-19 pandemic has caused disruptions in supply chains and manufacturing around the world. Asian computer chip makers have been hit hard. And that means companies that make products that rely on such chips are in a pinch.
It is estimated that one million cars will be produced this year because US car makers alone cannot procure the necessary computer chips. As a result, not only did new car prices rise, but used car prices also skyrocketed.
But as chip shortages have already hit sales of iPad and Mac computers on Tuesday and will soon affect iPhone production, other makers are beginning to be affected by computer giant Apple.
“The main factor is the shortage of staff at the manufacturing stage, especially due to the pandemic in East Asia, which has caused a shortage and closure of the foundry (the factory where the chips are manufactured),” he said. Sedamemic Professor of Electrical and Computer Engineering, and Computer Science at Northwestern University.
Memik states that automakers cut orders for chips when the COVID-19 pandemic struck a resurgence of demand. Major computer and electronics manufacturers were better off because they were able to stockpile supplies.
“When it comes to computers (laptops, desktops), big players like Samsung and Apple have always had a lot of bargaining power and better protection, so they started stockpiling computer chips early,” Memik said. Mr. says. “Therefore, the availability of the product to consumers was completely unaffected. The same is true for smartphones, which are said to have some benefits so far, but for now. Not so many. ”
However, Memik states that the pandemic has also changed the demand for chips. As more people work from home or work from home for pandemics, the demand for personal computers and game consoles has skyrocketed.
“This is one of the key changes we have observed, as the demand for these personal devices is so high,” says Memik.
“At the moment, the people in the automotive industry are the most affected, and somehow they brought it when they drastically reduced their chip orders at the start of the pandemic,” he said. Robert Sloan He heads the School of Computer Science at the University of Illinois at Chicago. “But everything else is at the tip of every month’s smartphones, laptops, and even printers (which may be missing).”
He states that in addition to automakers, computer game console makers are also struggling to meet demand.
“If teenagers want an Xbox, they have to wait for a while,” Sloan said.
The main reason for the prolonged chip shortage is the enormous cost of building a new semiconductor manufacturing plant.
“Chips are a very slow-moving business. It is estimated that it will cost $ 10 billion for a“ B ”dollar to start a new chip manufacturing plant,” Sloan said. “There is a huge time lag in chips due to the cost and difficulty of setting up a manufacturing plant.”
Even today, chipmakers have not yet returned to pre-pandemic production levels, according to Memik.
“They are bouncing back, but still not 100% capacity,” Memik said.
“On the manufacturing side, they are working very hard to recover and predict that they will return to full capacity within a quarter or so.”
“It will take a little longer and will probably grow well until 2022, in terms of re-coordinating supply and demand with consumers,” Memik said.
However, the pandemic experience can have long-term implications for how companies and countries view global supply chains and their potential vulnerabilities.
“One of the problems is that chip and silicon manufacturing are starting to become US national priorities,” says Memic. “It was happening so much that it had come to what was happening abroad, and there were already concerns about intellectual property protection and security concerns before the COVID-related shortages. And there was a lot of debate about making more production in US soil for mission-critical chip production. I think the conversation will be even more important. “
Note: This story will be updated in the video.
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