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Anyone who has tried to purchase a new electronic device in the past year has doubtlessly run into issues finding anything in stock. From appliances to new phones, personal electronics are in short supply right now. There are a lot of reasons behind this shortage, but they’re mostly related to a production shortfall in microchips.
This microchip shortage is predicted to last through 2022, according to experts, as manufacturers deal with an extreme bottleneck in the production of this vital component. This shortage has affected the prices of numerous consumer goods, including vehicles and video game consoles. Some analysts worry that this chip shortage is pressuring the US dollar, causing inflation.
The chip shortage was caused by the sudden shutdown of orders from car manufacturers in March of 2020. While global events at that time led to analysts assuming the demand for electronics and cars would be extremely low during that year, the reality turned out to be very different. People who were stuck at home and unable to spend their paychecks in brick-and-mortar stores turned to online shopping, scooping up everything from graphics cards and cellphones to new cars through online dealerships.
This massive increase in demand for microchips clashed with the lack of production. Since the orders for microchips were largely canceled in March and April of 2020, manufacturing plants had simply been closed or operating at minimum staff numbers. The influx of orders in the back half of 2020 caused an unprecedented bottleneck, with electronics manufacturers and automakers engaging in a bidding war to scoop up the limited number of microchips.
The shortage has been going on for well over a year at this point, but there seems to be no sign that things are easing. The demand for consumer electronics isn’t going down. In fact, demand is only growing as we move into 2022. The production of microchips is a complicated process that requires highly specialized fabricators, so it’s not easy to simply increase production numbers.
While it’s predicted that the bottleneck will ease, that point might not come for another year or more. Until new manufacturing locations are opened to meet the extreme demand for electronics, there will likely continue to be shortages in the tech world. For the foreseeable future, tech enthusiasts will have to contend with long lines, secondhand market price hikes, and “sold out” signs.
