The Covid-19 impact has been felt worldwide, with losses of jobs, deaths and even some industries feeling the squeeze. Now it is the turn of the technology sector, and the supply of semiconductors or microchips as they are also known.
Well publicised over the past year or so, with people only receiving one key with their new vehicle, companies such as Nintendo and Intel have even commented; it may be a few years before the electronic supply and demand levels out.
What Has Caused The Global Chip Shortage?
As mentioned at the start of this article, the global chip shortage has been caused by the Covid-19 pandemic. The surge in device purchases for those working from home, or needing to keep in touch with friends and family, has most definitely put a strain on the global supply.
Outside of the global pandemic, world events in locations such as Taiwan have limited the amount of production that has been happening. This has prompted many to call on some of the world’s largest companies to look at their demand and small suppliers to ramp up their production.
Why Can’t We Just Make More Chips?
Why can’t we just make more chips? Easier said than done when the whole world is feeling the strain. Plus, it is no surprise there is a shortage as it was reported sales of semiconductors dropped for the past 3 years, so the large producers were not geared up to deal with this type of demand.
It is now a race against time for global suppliers to produce chips in line with demand; however, there is also hesitancy. With the fluctuations in the technology market, manufacturers are reluctant to invest large sums of money into building new warehouses and know that demand could drop in this 2-year gap of expansion, leaving them out of pocket.
How has the Semiconductor shortage affected day to day running of the Vessel?
When essential electronic equipment fails traditionally, you could usually get the items off the shelf; nowadays, it’s not so simple hence why I’m writing this article. Without purchasing the correct parts, this can lead to having broken down systems for months. The onboard crew will need to be creative to make workarounds to keep these systems online, which tend to take away some features of the systems.
Will it affect Superyacht AV/IT refit?
YOT Store supplies numerous AV/IT Integrators in the yachting industry who are also feeling the effect. We have advised our client base to push Captains, Engineers, and ETO to make more cutthroat decisions earlier and decide on final designs versus dragging their feet on the inevitable refit. With the biggest brands in the industry, from Cisco to Crestron, majorly suffering from the semiconductor shortage, we urge all crew to be mindful of the semiconductor shortage and don’t leave it until the last minute as you may not even start the planned upgrades.
How Is 2022 Looking?
2022 is looking somewhat optimistic, but not until the middle of the year. With vast amounts of investment promised by manufacturers, it will take some time for them to be operating at full capacity.
There is a chance this could be felt for a long time to come, as the big tech companies, car manufacturers and even other sectors recover and get their backlog of orders sorted.
But, something is being done, which means we will be in a better position than we are now.
Will We Experience Further Shortages?
The short answer to the question is no one knows. We would like to think the world has learnt its lesson by not being ready for this sudden surge in demand. However, as highlighted earlier, with decline naturally occurring for chips, it could lull companies into a false sense of security.
However, what is apparent is the new players who have emerged in the market and seized this opportunity to gain new customers and build a presence. We would think their manufacturing capabilities can be scaled when needed to meet the ever-increasing demand with these new players.
With the technology sector being the most buoyant in years, supply and demand have just gone through the roof; however, if it has taught us anything, how reliant the whole world is now on various components.
Ensure you and your team let your clients know about the current shortage without false expectations. Plan for the future to get the critical spares ordered now versus joining the queues months later.
Ryan Porter – Director