Global Chip Crisis Continues

by | Nov 5, 2021 | Business, Hardware

The global chip crisis is continuing into 2022. The industry has been hit hard by a worldwide shortage of chips, which are used in computers and other electronic devices. This has left small businesses across the world to scramble for alternative solutions to their computer needs, as they can no longer source new parts on demand. For many companies this means relying on older equipment that may be slower or not as reliable as newer technology would be or buying older product that is still available in distribution warehouses. The future looks bleak as demand is set to outstrip supply for the indefinite future.

The global chip crisis started in 2016 as a result of China’s weak economy and the demand for technology dropping across developed countries, which caused companies to scale back on investment. This problem became more serious last year when Samsung Electronics Co., Ltd reported that they would be cutting their production by 30%. Their problems then worsened when Taiwanese memory chip maker, Micron Technology Inc., said that it would not be able to meet the global demand due to a supply shortage. Since then both companies have been working on resolving these issues by purchasing existing stocks from competitors and increasing their own production capacity.

The industry is expected to continue its downward trend for several years as manufacturers need to invest in new production facilities before they can increase their capacity.

Many businesses purchase hardware at the end of each year to prepare for the next. SpireTech is currently seeing 8+ week estimates from Lenovo, Dell, and HP on any newly built systems. Businesses will need to begin to pre-plan hardware needs in advance to ensure they receive what they need in time. SpireTech will continue to do its best to assist our clients with procurement of hardware that meets their standards and needs. Advanced or built-to-order systems are going to continue to have a lengthy purchase cycle.