Qualcomm, which makes processors and modem that power any of the leading smartphones and other consumer gadgets, what the resurgent car industry was facing called “ Chipageddon.” When the supplies run short, it halts manufacturing chips, as gamers struggled to buy new graphic cards, Apple had to stagger the release of its iPhones 12 Pro with the latest A14 Bionic chipset, and the latest Xbox and PlayStation consoles came nowhere close to meeting demand.
Samsung is struggling to fulfill orders for memory chips it makes for its own and others’ products.
Lockdowns fuelled sales of computers and other devices to let people work from home, who bought new gadgets to occupy their time off under the Furlow scheme.
In the third quarter of 2020, sales of cars came roaring back more quickly than anticipated, while demand for consumer electronics continued unabated.
It usually takes 18 to 24 months for a plane to open after they break ground as the rollout of 5G infrastructure is also adding to demand.
Huawei put in a big order to build up a stockpile of chips even before US trade restrictions blocked it from ordering more.
Both TSMC and Samsung, the leading chip producers have spent billions getting a new highly complex 5-nanometre chip-manufacturing process up to speed to power the latest cutting edge technology products.
One chipmaker told the Wall Street Journal backlogs were now so big, it would take up to 40 weeks to fulfill any order a carmaker put in today, and the automotive industry is set to lose £50bn of sales because it has had to close or reduce output.
The US still leads in developing the components’ designs but Taiwan and South Korea dominate the chip-manufacturing industry as they account for 83 per cent of the global production of processor chips and 70 per cent of memory chips.
The country most affected is China, which makes more cars in the world than any other nation, as 250,000 fewer vehicles will be produced during the first three months of the year as consequence.
As supply is limited, if there’s a gadget you really want to get hold of, don’t think about hanging around to see if there’s a better price in a few month’s time.