The ongoing global computer chip shortage is showing no sign of improving, with numerous companies across the world announcing stock shortages and price increases.
Stocks of chips started falling last year when the world went into lockdown, which caused the production to drop.
Factories have since reopened, and production is underway, but the immense surge in demand for electronic products during lockdown has created a demand which producers can’t meet.
The effects of the shortage are being felt across numerous industries. Ford had to cancel shifts between two different cart plants and announced that profits could be down by $2.5 billion. Nissan and General Motors are also feeling the effects of the shortage.
Sony & Microsoft
One industry that has definitely felt the effects of the computer chip shortage is video games. 2020 and 2021 should have been milestone years for Sony and Microsoft, having launched the PS5 and Xbox Series S and X at the end of last year.
Instead, the chip shortage has made it hard for customers to purchase the next generation console of their choice. Forcing Sony and Microsoft into a scramble to meet the growing demand.
Sony commented on the shortage last month, stating it was unlikely to hit sales targets for the PS5 because of production shortages. Microsoft is in a similar position and has forecasted supply issues lasting well into the second half of 2021.
Will stocks return to normal?
It doesn’t seem like stock levels are going to return to normal any time soon unfortunately. This results from the continuing demand driven by the way we’ve all changed our lives in the past twelve months.
While there isn’t an end to the chip shortage in sight, it has led the U.S. to consider developing a more homegrown chip production industry.
For now, the economy and chip-purchasers are at the mercy of the chip production industry. This doesn’t bode well when you consider that chip producers like AMD, Qualcomm Inc. and Applied Materials Inc. are all reporting profits to the increase in value as a result of demand.
Chip producers have stated their intentions to expand production facilities, but that isn’t an overnight process and could take some time.
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