Chip Makers Warn of Continued Gadget Shortages Through Autumn

Chip Makers Warn of Continued Gadget Shortages Through Autumn

When the covid-19 pandemic began shutting the world down in late 2019 and early 2020, there was an early run on household supplies, followed by shortages of gadgets like webcams and laptops. Toilet paper is now readily available, but major hardware companies like Qualcomm, AMD, and Sony warn that chip shortages will continue to impact tech well into 2021.

When responding to a question during the company’s Q1 2021 earnings call, incoming Qualcomm CEO Cristiano Amon warned investors about chip shortages “across the entire industry.” Amon said these shortages aren’t limited just to new or high-end chips, but also “legacy nodes” used to make chips for broader markets like automotive and networking.

The chip shortage has affected the auto industry so acutely that in a letter seen by Reuters, Germany recently reached out to the Taiwanese government to ask for assistance to ease the shortage on chips used in cars. German Economy Minister Peter Altmaier specifically named Taiwan Semiconductor Manufacturing Co in his request.

“I would be pleased if you could take on this matter and underline the importance of additional semiconductor capacities for the German automotive industry to TSMC,” Altmaier wrote.

The pandemic has made people more wary of public transportation, which has boosted auto sales, but the shortage of automotive chips has also been amplified by a number of restrictions and bans placed upon Chinese chip makers by the Trump administration.

In fact, the shortage for automotive chips has gotten so bad that just this week, GM announced that it would be forced to shut down production for a week at four of its plants starting Feb. 8, with two additional plants scheduled to run at half capacity during that time.

On the PC front, following big CPU and GPU launches by Nvidia and AMD last spring that were plagued by limited supplies, AMD CEO Lisa Su said during the company’s recent earnings call that she expects to see shortages or a “tightness” in chip supply continue throughout the first half of 2021, especially when it comes to low-end PCs and gaming (both PC and console).

For those hoping to bide their time inside playing one of last spring’s new consoles, things have been especially dire with continued supply issues for both the PS5 and Xbox Series X and S. And while both Sony and Microsoft have been relatively upfront about limited console stock, and with Microsoft having recently asked AMD for help, customers are expected to have a hard time buying a new Xbox well into autumn or early winter.

Even components like RAM have been hit with shortages, following two disruptions to Micron’s fabs that forced the company to go offline twice in December.

When I asked a number of PC vendors during CES 2021 about other causes for chip shortages, a common sentiment I heard was that in the beginning of the pandemic, a lot of customers scrambled to buy cheap or affordable laptops (particularly Chromebooks) as a quick stop gap measure to help support remote learning or working from home.

However, with the pandemic still not under control and many people still largely confined at home for the foreseeable future, many are looking for more permanent home tech solutions, which has caused a second run on consumer gadgets like laptops, monitors, and webcams.

So while there may be an end in sight to chip shortages as we move into the autumn and winter, the first half of 2021 continues to look somewhat bleak when it comes to gadget and even auto availability.

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