What Caused the Global Semiconductor Shortage

I finally managed to upgrade my PC, 5 years late (more on that later). Getting hold of parts has not been easy, but why has there been such a shortage of semiconductors?

Covid and Supply Chains

Even though there are reportedly no specific shortages for semiconductor production, modern Just in Time supple chains can be very sensitive to disruption. Even if chip production is at 100%, there are other areas that can feed into delays.

Ramping up isn’t easy

Semiconductor production (especially the cutting edge processes which is what most people are after) is extremely complex. The machines to make chips via Photolithography are expensive and time consuming to make. You can’t just open a new plant in a few months.

Good hardware (finally)

AMD Ryzen 5000 series CPU’s, Nvidia 3000 series GPU’s and AMD 6000 series GPU’s. People are finally getting compelling upgrade options and they want new hardware.

At the same time there are new games consoles from Sony and Microsoft, which also need brand new chips.

Crypto

Even if there were enough chips to go around, with the massive increases in crypto currency prices mean crypto miners are buying as many GPU’s as they can. The money they can make makes paying was over MSRP for a card a non-issue, leading to scalpers buying cards and flipping them on e-bay.

Working from home

With so many people working from home, lots of people have realised that their ageing computer just won’t cut it any more. For years smartphone and tables have been eating desktop and laptop sales, but in 2020 their sales grew for the first time in 10 years.

Stimulus

The US government decided to send out stimulus checks that would really help those who needed money for long. But for everyone who was ok financially they could afford to splash out on something. It had to be something at home though, since no one could go out. I wonder what they decided to buy.

 

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