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The Global Chip Shortage Problem might last longer than Anticipated

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A deep thinker and creative who is constantly on the clock to answer questions many ask. A lover of poetry and prose. She believes firmly in the ways of our fathers, conservative? No. Just a history nerd.

Given the demand outpacing the supply of the semiconductor chips for our laptops PlayStation 5, Xbox Series X, and many others. The markets seem to have come to a halt. With demands/orders jamming the system more than supply saturating the system.
There are many answers to your questions of why.

One factor is how the shutdown of factories slowed down production and to top it all of, people sitting at home feeling idle just kept ordering more laptops and Ps5’s.
Another reason is in fact, the trade wars started with China by Donald Trump which has decreased the size of the market.

micro chip shortage
A typical computer chip on board

During an interview with the verge, UCLA professor — Christopher Tang stated:
“In the year 2000, we used to have 30 companies that made their own integrated circuits. Then, they discovered that it’s cheaper to outsource,”

So another reason for our problem is that these companies sought what would be most convenient for them—not for the market.
Which was only natural.

With even chipmakers like AMD switching to outsourcing—where they outsource the actual manufacturing to other companies (like Samsung or TSMC)—which in turn, made the market smaller and demand higher—and the increasingly computerized nature of even more mundane products like cars or smart home accessories — has spiked, there’s never been more need for chips.

computer experts

According to experts though, the solution for this problem is time and more time. Eventually, demand will stop outpacing supply and things are likely to go back to normal.
But on the other hand, TSMC has announced plans to invest $100 billion over the next three years to increase its capacity to meet rising demand.


And Intel plans to spend $20 billion on expanding its fabs in Arizona, as well as opening its doors to produce chips for other companies (similar to how TSMC and Samsung already operate), adding a new major supplier to the marketplace.

So like they say, “patience is bitter but its fruit is sweet.” We’ll just have to wait and see.

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