Electronic Christmas gifts might be scarce due to semiconductor chip shortage
There might be a shortage of popular electronic Christmas gifts available this year due to the global semiconductor shortage.
Items such as laptops, smartphones and game consoles could be scarce as the pandemic left less semiconductors manufactured than usual at the same time as demand for electronics increased.
Even tech giant Apple has been hit by the rumor that the company is cutting production of the iPhone 13 due to the shortage.
While many are aware of how much trouble the auto industry has faced due to the lack of conductive chips, it is not quite as well known how much we rely on chips for everyday products.
Semiconductor chip shortages could lead to shortage of electrical items this Christmas
This includes items such as toasters and washing machines.
This is Money, with expert help, examines what caused the shortage, what products might be in short supply, and when it is likely to end.
What caused the semiconductor shortage?
The shortage started due to the pandemic, as less semiconductors were manufactured than usual as demand for electronics increased.
This backlog, combined with other factors including tighter international restrictions on supply movements and increasing shipping costs, has had a domino effect in several sectors, one of the most affected being the automobile industry.
The Society of Motor Manufacturers and Traders predicts that the chip crisis will wipe out 100,000 of the UK’s total auto production by 2021.
Wayne Lam, Senior Director of CCS Insight, said, âSemiconductor manufacturing has always relied on scale to make manufacturing economically rational.
âWhen the pandemic hit, chip manufacturing was dramatically disrupted.
âThe main indicators of job cuts and uncertainties caused by the initial lockdown have clouded everyone’s short-term plans.
“Therefore, given the limited information available to chipmakers at the time, a concerted effort was made to shelve the old semiconductor manufacturing plants and rebalance their product line towards margin products. higher like the advanced process node chips, for example, think of the chip in your smartphone.
âThis decision reduced the capacity of older and ‘mature’ silicon processes, which instantly created a shortage.
âMature process manufacturing accounts for almost half of the global semiconductor revenue, so it’s not an insignificant part of the global market. “
Automotive manufacturing is an industry that has been deeply affected by the global chip shortage
How does the shortage affect electronics?
Semiconductors are an essential part of electronic devices without them, they will not work and therefore cannot be manufactured.
This includes a number of household items including toasters, washing machines, and refrigerators.
Firm, Leasing Options, warns that this is why so many electronics should be impossible to buy this Christmas.
What gifts might be in short supply?
Leasing Options revealed the Christmas gifts that are most likely to be scarce this Christmas.
1. Smart phones and watches: The iPhone 13 won’t be the only smart device to be in limited supply this Christmas.
The Samsung Galaxy S21 FE was slated to launch in August, but it has now been delayed until the end of October, with rumors that this was due to a shortage of chips.
2. Laptops: Semiconductors are a fundamental part of how portable computers work. Therefore, buyers should expect brands like Acer, Dell and HP to run out of manufacturing laptops in time for Christmas.
3. Household appliances: Common household appliances such as toasters, washing machines and refrigerators are also falling victim to the shortage.
It shows how semiconductors are a part of our daily life without many of us even realizing it.
4. Game consoles: The release of the PlayStation 5 and Xbox Series X | S in 2020 has played a major role in the semiconductor shortage due to the high demand for consoles.
Shortages of these consoles remain a problem in 2021 and according to the manufacturer Toshiba this could last until 2023.
5. Televisions: Most high-end televisions use semiconductors to achieve better screen definition. All TVs with a screen using organic LED (OLED) technology are at risk of being affected by the shortage.
Lam added: âAs we head into the Christmas gift and holiday gifting season, this supply chain constraint will be very pronounced as goods that typically arrive weeks in advance from factories in Asia are all moored in ports or perhaps still on ships moving around the globe.
âThe general consensus that automobiles are affected the most, followed by products that require less sophisticated silicon such as household appliances and toys – essentially your normal holiday gift rate.
“It’s hard to say how severe this shortage will be, but it’s been over a year and the global supply chain is falling into place.”
Game consoles are one of the most popular Christmas gifts that could be limited
When will this shortage end?
Experts predicted that the shortage could last for another year or so.
Lam said, âWe will see a chip supply constraint throughout next year, with supply and demand returning to balance around 2023. Chip companies are also reluctant to add too much capacity too quickly. , which could cause chip prices to drop.
âThe industry’s goal is to solve the huge supply chain issues introduced over the past 18 months and get back to a stable state.
âUntil all the problems in the global semiconductor supply chain are resolved, we will live with one kind of shortage or another.
âUltimately, markets are a very efficient construct, and ultimately when things get back to ‘normal’ market forces from efficient markets will help stabilize the ship and restore the balance between l ‘Offer and demand. “
Other experts believe the shortage should encourage increased production of chips in the UK.
Craig Melson, Associate Director for Climate Change, Environment and Sustainability, added: âSemiconductors are vital to the modern world and we believe the current shortages and disruptions will normalize within the next six to nine months. .
“The semiconductor shortage poses a challenge for the government to create a business, commercial and regulatory environment that encourages manufacturers to start producing chips in the UK.”
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.