Computer Chips In Short Supply

A serious shortage of processor chips is affecting the supply chain of computers and other electronic devices. It's caused by a combination of supply and demand changes.

The problem has caused not just price rises but a lack of availability. Devices as diverse as the latest iPhone model, the PS5 games console and high-tech cars have all been delayed or in short supply.

The Guardian reports that the problem is partly down to a backlog caused by chip production factories shutting down for social distancing reasons in the early stages of the pandemic. However, even as that clears, demand is rocketing, with price rises inevitable (Source: theguardian.com)

That's partly because of more people wanting gadgets and devices that require a lot of processing power. In particular, the problem is driven by devices other than traditional computers getting "smart" features, such as televisions or cars with increasing automation and assistance features that require computing.

Bitcoin Worsening Problem

Another problem is that specialist graphics cards have found an unlikely audience in "cryptocurrency miners." Those are people who build large-scale computers to verify transactions on the digital "ledger" that records all activity with the virtual currencies.

The computer that does this the fastest earns a unit (or fraction of a unit) of the cryptocurrency as an incentive for people to carry out the verification. At the moment, the rapidly increasing value of some cryptocurrencies (in terms of real world money) can make it a profitable investment to buy up graphics processors, which are particularly suited to the speed and type of calculations involved.

Auto Makers At Back Of Line

The shortages have also highlighted the sheer complexity of supply chains. For example, Samsung is not only one of the world's biggest processor chip producers, but also one of the biggest buyers. That's led to the bizarre situation where it may have to postpone the release of its next major smartphone model.

The Guardian also notes some surprising victims of the shortages. Several major auto manufacturers have had to put production on hold because they don't have the buying power to negotiate priority supplies. That's because even though high-tech autos are big business in raw financial terms, they are a comparatively small player in the market for buying chips. (Source: kotaku.com)

What's Your Opinion?

Have you had problems getting hold of any new electronic devices? Do you think the market will adjust to increasing demand for processors? Should governments try to discourage or even restrict cryptocurrency mining?