Chip shortage will get worse

Hanno Labuschagne

Hanno Labuschagne

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Chip shortage will get worse

Intel Corp. Chief Executive Officer Pat Gelsinger predicted the shortage of semiconductors that’s hurting industries from automotive to consumer electronics will bottom out in the second half of this year before starting to improve.

“I don’t expect the chip industry is back to a healthy supply-demand situation until ’23,” he said in an interview. “For a variety of industries, I think it’s still getting worse before it gets better.”

The economy’s rebound from the depths of the pandemic has caused a flood of demand for the components that are the heart of all modern electronics.

[Bloomberg]
 
Price gouging? Would love to see a proper investigation into this as it's just too easy to blame Covid for anything and everything lately.
 
I had a conference call with NVIDIA recently. They don’t really know what to do as capacity is maxed out at the fabs until 2023. Via other sources which were off the record, fabs which never used to sell more than 80% capacity have now exceeded 100% capacity.

It’s not just graphics cards.

Demand has never been this high (everyone suddenly needs a way to work from home, everyone suddenly needs decent entertainment while locked up at home most of the time, datacenters have needed to increase capacity due to a massive surge in requirements for cloud storage, virtual meetings, etc), and supply has been somewhat crippled. Internationally, AMD CPUs have been almost impossible to get until recently. Last year SA had a shortage of Ryzen 3000s, this year we have a shortage of Intel 11th gen with some SKUs being out of stock with an ETA of late this year.

Cooler Master always used to have a 6-8 week delay when their factories closed for a week for the Chinese New Year, so being closed for much longer for their lockdown caused delays approaching a year.

Some Antec cases have an ETA of 2022Q4. The supplier has actually removed them from the price list as they’ll probably be end of life before they’re available again. The NX1000 is an example.

Some popular kits of RAM have been out of stock for close to a year now. Some motherboards are closing in on 3 months of being out of stock.

It SUCKS.
 
The shortages were coming anyway. Covid just pushed up demand and made it worse.
 
Quicks said:
Price gouging? Would love to see a proper investigation into this as it's just too easy to blame Covid for anything and everything lately.
Click to expand...
Not exactly.

What started this was the US-China trade bans. Huawei, anticipating that the ban would be permanent, used the grace window to stockpile components like DRAM, timing controllers, all sorts of chips and things they'll need for the future. One company stockpiling like that shouldn't impact the supply of others, but Huawei's hoovering up of everything they needed for the next three years created a small backlog for other suppliers. Texas Instruments had some good quarters thanks to Huawei's stockpiling.

By the beginning of 2020 Huawei had moved all of their manufacturing and chip supply to Chinese and Taiwan sources, as well as other Asian countries like South Korea and Singapore. The backlogs were being addressed, especially in RAM supply - towards the end of 2019 GamersNexus reported on DRAM price increases happening again as Intel's 10nm supply started working itself out. DRAM vendors were already in hot water for price fixing during the shortages Intel experienced in 2018-2019.

This was exacerbated with the pandemic. As remote work took hold in China following extremely strict extended lockdowns, entire supplies of components ran out. It didn't help that during Chinese New Year COVID spread from Wuhan to every other major province in China. Workers in factories located in Guangzou, Shenzen, Macao, and Hong Kong couldn't go back to work because their cities were barricaded. Stocks in factories ran dry and that led to a cascading failure in the supply chain as production needed to ramp up to produce more computers and peripherals to feed the demand.

The rest is history. Once the pandemic in China delayed the return of workers to factories, the shortage took hold and things exploded from there. People I know have had orders delayed for up to a year. This affects so many industries completely unrelated to computers as well - orange fizzy drinks are experiencing a shortage. Water treatment chemicals are in short supply. Fibre cabling has increased in price and deliveries are being prioritised.

There was always going to be a bit of a shortage temporarily (at least in the PC industry) as backlogs were being addressed and Chinese manufacturers stockpiled components before being completely banned, but the pandemic just made it all worse.
 
This is terrible news.... I mean there is already a shortage of PS5s, now what will the world do. Disaster.
 
AAAAND this is what planned obsolescence which some people swear by religiously gets you.
 
supersunbird said:
Huh?
Click to expand...
Everyone relies on a constant stream of chips because everything is designed to be obsolete before it physically fails with the assumption that the raw materials will not run out.

Everyone that bought something that's going to be obsolete within the next few years or even decade.... is now very likely s-t outta luck to some degree.

On the flip side the second hand market will get an unoficial boost and the price of everything is going to skyrocket.
 
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