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The global chip crisis, or semiconductor shortages, seems to have affected everyone, although this was expected.
Silicon chips are present in every device, including phones, computers, kitchenware and even cars. In addition, all these technologies are becoming more sophisticated, making advanced processors used in every device.
These crises result from problems in global supply chains or causes of labour availability. But instead of operating companies, which rely heavily on these chips for their fields, taking industrial measures to limit the impact of these crises, they have left everything intact.
Now that the last crisis, which began in 2020, has occurred, the entire tech sector has become a victim, including everything from cars to the best and most modern screen cards used in the gaming hardware industry. As a result, everyone is now asking: What is this global chip crisis? And why does it happen? And how long will it take to go away and see improvement again?
Not all of these questions can be answered, but we gathered all the sources to try to explain what happened until we ended up here.
What is the Global Chip Crisis?
The global chip crisis affects semiconductor manufacturing and all sectors that rely on these distinctive vectors. This happens when semiconductor makers cannot meet the needs of other sectors to manufacture a sufficient number of chips. These chips are significant in technology, as they are used in every modern electronic device worldwide.
Integrated circuits are made by forming overlapping layers of silicon by placing nanochips with semiconductors. This invention revolutionized the field of electronics manufacturing – and had an impact on the world – for 70 years, but integrated circuits created a complex problem simultaneously.
Any unexpected disruption in the manufacturing process of these circuits can cause massive shortage crises in all kinds of electronic consumables or even those that need electronic elements during the manufacturing phase. It impacts everything from the quality of railway services in cities to the speed at which food reaches supermarkets.
The chip crisis has effects beyond the lack of availability of everyday consumer goods such as the best screens, computers and tablets.
We are now in the midst of one of these crises because consumers have gone through crises of shortages of all kinds of goods over the past two years, so much so that this crisis is the main instigator behind inflation and the rise in the prices of all purchases in the world.
What Caused This Crisis?
The main reason behind this global crisis is the outbreak of the coronavirus COVID-19, which became a pandemic in late 2019 and so far.
The pandemic has resulted in two main things: the disruption of global supply chains due to labour shortages and the increase in the Demand for computers due to the dependence of the economy based on work from home by 13%.
In the field of computing, in particular, the chip crisis has worsened due to the increasing popularity of digital currency. People mining cryptocurrencies have played a role in the scarcity of processors and screen cards due to the increased demand for these pieces, making them more difficult for the average person to access.
A host of events have also exacerbated this crisis, including political tensions between China and America, blizzards in Texas, Japanese factory fires, factory closures in Shanghai due to the coronavirus outbreak, and the current Russian-Ukrainian war.
When Will The Global Chip Crisis End?
Several experts working at Intel and AMD have predicted when the semiconductor manufacturing sector will recover from this crisis. They unanimously found that it would continue throughout 2023.
Intel CEO Pat Gelsinger explained: “Demand for these chips has increased terribly by 20% year after year, and disruption of supply chains has caused a sharp gap, with Demand remaining high. It will take several years for things to get back to normal.
“Dell co-founder and CEO Michael Dell also see this shortfall continuing for several years. AMD CEO Lisa Sue shares the same view, saying that the shortfall will ease in late 2022: “This pandemic has caused demand to increase more than we imagined.” Reports published by Gartner. The industry analyst supports the projections put forward and suggests that this crisis will continue throughout 2022.
Currently, TSMC and Quanta Computer. The only suppliers of some of the best types of Macs are trying to open new labs and change the manufacturing site to increase chip production. Still, this process takes years to produce results that reduce this crisis. In addition, TSMC is trying to operate in new locations in the United States, but the process is also slow.
But there is a glimmer of hope, as some recent developments have markedly improved. For example, the manufacture of processors and supply cards is back better than before, and these are critical indicators of how bad the crisis is, and one of the reasons behind this is the decline in Demand for cryptocurrencies in general and the easing of Ethereum mining.
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