How Has The Current Chip Shortage Impacted The IT Equipment Landscape?

- Posted by Author: admin in Category: IT Equipment |

Semiconductors are also known as chips. Those chips are important for the functioning of the product. The chip can even be altered to specific specifications which will be then called doping. They are found in hardware – computer hardware, gaming hardware, smartphones, cars, processing units. If it is an electronic device, it has a chip. So it is probably clear that there is a high demand for these chips in the market.

A semiconductor conducts electricity. It does conduct electricity more than an insulator but not more than a conductor. The semiconductors, help in passing the current throughout the device, if required then more current in a certain direction. They are also sensory to heat and light. Their main function involves increasing the signals, as it involves conducting electricity, it was expected to conserve energy and switching.  They are mainly found in electronic products. They fit into various products because they are small, they are used in products because they are fast and they are preferred by companies because they are cheap.

They are four main categories of a semiconductor:


It temporarily stores data which helps in passing information to the computer’s brain. It also helps in processing codes from Random Access Memory and Read-Only Memory, to access memory randomly or to access memory permanently respectively. RAM helps in accessing data quickly. RAM is stored with programs of the computer and the data which will be required by the CPU in real-time whereas, ROM is a pre-recorded memory that is used to boot the computer. Memory chip helps in performing actions like calculations.


The central processing can be called a microprocessor but every CPU cannot be called a microprocessor. It is basically a central unit of a computer not necessarily CPU. It helps in processing arithmetic operations and logic operations. It works by collecting data or command then fetches the instructions required to be applied to them and then decode the information and provides it to the user. It is a very important chip since it helps in performing certain tasks which can be said to be the main purpose of using that product such as calculating in a calculator, typing, and editing in computer and nowadays communicating over the internet.

Commodity Integrated Circuit

They can also be called standard chips. They are supposed to follow a routine process. They are built for a specific purpose. They also perform a repetitive task more of alike to be used for a single purpose. They can also be said as a circuit stabilizer that stores voltages and amplifies signals and works as a switch in digital circuits. It is a chip with transistors. Although they hold a limited amount of power. It is usually made up of silicone. It is known for its small size, reliability and since it is less in size it consumes less power and it is also the reason why it is not easy to repair.

Complex System on a Chip

It is a single chip with an entire system. It brings an entire computer system to a platform. It takes electrical circuits from several selected computer components. It may have analog functions, digital, etc. it must contain a single processor. It certainly uses less power, requires less space, and is mostly reliable. They are nowadays usually in smartphones and tablets. It can regulate voltage. They have more processing power. It can also receive audio and detect sound. Although it is larger than a CPU.

Every month there is a launch of either a new phone, new car, new device, let it be for a medical purpose, defense purpose, etc. Obviously, these products are not only just made one or two or only a handful, they produce these products to distribute it to every place in the world to grow their business, to compete.

Of course, competition is required in the industry. Competition helps in creating innovations, helps in developing and evolving. Suppose company A is in competition with company B, between them there is a certain feature which is like a traditional difference between them upon which there is a certain feature that is open to change as per the demand of their customers or rather the feature in kept vulnerable for future. Now company A has provided a certain benefit in their product and looking into these, company B will try to provide even a better benefit than company A. when the company will be trying to provide a better feature or a similar feature to company A, they will be required to produce a different chip. Now, the customers who earlier bought from company A will either demand from the company to introduce the same feature or to provide a better feature in their product. Then the company will start to produce a product which either may have the same feature from their previous model or it may have a similar model to company B or a completely different model. Even to produce these new models different alterations will be required to be done hence the production of different chips. Nowadays, especially in the field of smartphones, companies are producing smartphones probably with the same features but they are differentiating these products with versions of RAM and ROM combinations. Also in the automobile industry, the same series of cars are launched with three different varieties. These together involve the production of thousands of chips which are different for each company, serving a different purpose in each product. So these competitions lead to the demand for these chips. This scenario is not only in the automobile industry and automobile industry but in the medical industry which will help in detecting the diseases more quickly making fewer mistakes, to even produce the body of electronic products, machines are running with these chips. To equalize the level of supply with the demand, products are made mechanically and they have chips in them.  Probably a chip-making machine has a chip in it. 

 Since the production of several electrical devices is dependent on these chips and it is all over the news that there is a shortage of semiconductors and hence this shortage is affecting several businesses. Previously, it’s mentioned that there needs to be the production of several varieties of chips demanded by a single company and there are several more companies like these. Now process needs to be changed and processes are different depending on the features required in that semiconductor and this change cannot be done in a blink of an eye, it will need time probably more than a week.

How the COVID-19 Pandemic Made the Chip Shortage Even Worse

The COVID-19 pandemic did change a lot of things around which also includes the purpose of demand for these electronic devices. During this pandemic, several companies introduced work from home. To make these work from home, a more efficient computer, laptops, the smartphone is required and not only big companies even schools introduced online classes. Online classes will now require nothing more but at least a smartphone with a camera; the phone may not require much-advanced features but a camera with effective usage. This pandemic also leads to less profit earned by the company’s due to loss of a job or reduced pay and also difficulty in finding a job. Those who are still earning will need new ways of entertainment. These electronic entertainment industries had a rise in demand whereas the factories of car industries were shut. These shutdown of factories made the chip producer of car industries shift towards these electronic entertainment industries. Now that there is demand for car chips by the car companies, the car chip production company is unable to deliver them. Even refrigerators, washing machines, air conditioners too require chips in them.

Due to the pandemic, several chip-making industries were shut and major chip production companies were forced to shut their facilities. Anyway, the demands were increasing every year before the pandemic and during this uncertain event the demand first halted, and later on the demand started to rise. This is also leading to certain changes in products as products are now remodeled. These changes are impacting companies, people, and also developments. This pandemic has created a misbalance between the demand and supply of the semi-conductors. The automotive industry is said to be an important economic sector by revenue and it is severely hit due to a shortage of chips. The automotive industry involves companies who are involved in bringing an image of a motor vehicle on paper before it is built hence they design, develop, manufacture, and also sell and market motor vehicles. It also involves the production of accessories for motor vehicles. Designing and to have that neat cut, the product cannot be handmade; it needs to be machine-made to have that precision. Designing these designs through a machine too requires a chip.


Certain measures can be taken such as the chips can be supplied to the companies depending on their purpose or its urgency. If possible, providing companies with a certain amount of chips to different types of industries not necessarily equal. Who knows! Maybe this turn of even may turn out to be fruitful to the industry in the future.