Chip Shortages Persist and Effects Are Now Notable for Consumers

  • The effects of chip shortages have already cascaded down to the consumer level.
  • Product makers, service vendors, and resellers are all seeing their inventories shrinking rapidly.
  • We may not see any improvement in the situation for at least another two years.

The global chip shortage that has hit such a wide spectrum of production lines, from electronics to cars, has now reached down to the consumer level, and clients are seeing their orders getting severely delayed. The problematic situation was created by “a perfect storm” of events, like the disruption of supply chains due to Coronavirus and the shutdowns imposed across the world, and also the sudden rise in demand due to the adoption of remote work.

Last month, Samsung, a chipmaker themselves, warned of a “serious imbalance” in the semiconductor production field, declaring that they’ll probably have to postpone launching some of their upcoming flagship models – and even to skip the Galaxy Note altogether.

Today, a Bloomberg report focuses on router vendor Zyxel, who is now dealing with a delay of sixty weeks on router orders. Zyxel products are used by organizations handling infrastructure-level services like telecom carriers, so not having the equipment needed to replace old and failed units could soon start to have effects that are noticeable down to the basic level, the subscribers.

Notably, several Zyxel items manufactured in China were being carried in the Evergreen ship that stuck on the Suez Canal recently and also in ships behind it. That event played an aggravating role in an already desperate situation for the router maker.

But apart from routers, we now see even Apple stuff being threatened. Until now, Apple was able to secure adequate supply by booking production lines in TSMC and Samsung soon enough, but continuing to do the same proved particularly difficult. Some experts in the field claim that this is why Apple has been delaying the launch of some products that are otherwise ready, as the company is known for putting product availability above all else.

In fact, there’s a Nikkei report that came out today claiming that some MacBooks and iPads will be pushed further down the road as production of their chips at the needed rates cannot be guaranteed. If that’s the case, it could force Apple to omit some models to at least get something out there this year. According to the same reports, the next-gen iPhone hasn’t been affected by the shortages yet, although some components in the device are on low-level.

As for when to expect the situation to improve, experts believe we’re still not at the worst point. By the end of Q2 2021, smaller players will start running out of critical inventories and will scale down production or cease it altogether. TSMC and Intel have announced their plans to develop new fabrication units, but we’ll have to wait at least two years for these to become operational. In summary, it could take until the end of 2023 before we see product availability return to normal levels, and that’s maybe quite optimistic.

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