The ongoing global computer chip shortage is the reason , why and But what is behind the shortage, and will the problem continue into 2022?
Microchips are both increasingly vital – found in everything from laptops and cars to fridges – and increasingly complex. “The first Intel microchip in 1971 contained 2500 individual transistors on a single chip,” says . “Now, in some of the latest technologies there are around 30 billion transistors on a single chip.”
But this complexity isn’t at immediate fault for the shortage. “I think what’s led to the shortage is not so much the complication of the product itself,” says Jennings. “It’s actually the complicated supply chains.”
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Putting a single chip together could involve anything from 10 to 100 different manufacturers working on the same piece of semiconductor wafer, the material used to create chips, says Jennings. “I’ve heard of cases where effectively your semiconductor wafer travels the world between three and six times to be made,” he says. Taiwan and China are two of the biggest hubs for semiconductor manufacturing in the world, but parts are sourced globally.
The process is so complicated that if any one aspect falters the whole system is slowed down. In 2021, and . Then there is the coronavirus pandemic. “There was a perfect storm,” says Jennings. “People have been spending more on electronic consumer products and covid-19 has also been shutting plants down.”
While some chip giants like Taiwan Semiconductor Manufacturing (TSMC), have scaled up production efforts to meet the demand over the past year, there is only so much they can do. Chips are like vaccines, says Jennings. “You can’t just invent a new vaccine and roll it out immediately,” he says. “It has to go through lots of trials and testing.”
And because chips have become more complicated, each part of the process is developed by specialist organisations around the world, says Jennings. “Changing one bit of the production line may affect the product’s reliability and so needs to be rigorously tested.”
This is especially true when it comes to chips used in cars. “These chips need to last for 10 years at least,” he says, meaning they require a lot of testing, which makes it hard to scale up manufacturing capability quickly. “Chip making is so complex and fragmented that it’s amazing that it all comes together and works in the way it has,” says Jennings.
The current shortage should mark a turning point in our relationship with microchips, says . “Before, the public didn’t know what chips were or why they are important,” says Asenov. Now, governments are seeing chips as a strategic asset, wanting to free themselves from being beholden to Taiwan and China. “There is a political opportunity for governments to invest billions into semiconductor manufacturing,” he says.
US president Joe Biden has to incentivise chip manufacturing in the country. The European Union over the next few years for the same purpose. Meanwhile, and
New factories will come online slowly, such a But in the near future the shortage is likely to continue, or possibly even worsen due to the omicron coronavirus variant.
“I think the biggest issue right now is with the omicron variant and China’s policy of wanting to have zero covid infections before the Winter Olympics,” says – the games are due to start in February 2022. He says – a key shipping port – due to fears over the omicron variant. “I also believe they will have no hesitancy shutting down factories and transportation links because of this zero-tolerance policy,” he says.
Shih also notes that a lot of the testing and assembly of chips happens in China, Malaysia and Vietnam. “All these countries suffered from big lockdowns due to the delta variant and it took out a lot of capacity,” he says, adding that large proportions of their populations have yet to be vaccinated or been given a booster jab.
In other words, don’t expect the shortage to be relieved any time soon. “I think there are a lot more surprises to come,” says Shih.
