The ongoing global supply issue in computer chips is posing significant challenges and shortages are expected to continue well into 2022.
This chip shortage has been caused by a combination of factors, including the global Covid-19 pandemic, various manufacturing challenges, and increased demand. As a result, businesses and consumers alike have been facing extensive delays in their supply chains, which is having a knock-on effect on most commerce.
What are computer chips?
Chips, also known as semiconductors or microchips, are the “brain” contained in every electronic device, from mobile phones to cars. The size of chips varies, but the construction of each requires multiple complicated steps, time, and expert production. For example, Intel’s Xeon CPU is a highly complex chip capable of running sophisticated machine learning applications and running 4.2 times more virtual machines per server than earlier generations.
How did the shortage happen?
There was an initial temporary delay in semiconductor supply when factories closed in the beginning stages of the Covid-19 pandemic. As production recently returned to normal however, a surge in demand driven by changing consumer habits has led to a serious shortage in chips.
This perfect storm of supply and demand issues is causing significant headaches across all sectors, and the crisis is predicted to get worse. Furthermore, it can take up to two years to get the factories that produce chips running to full capacity, with each new factory that is built costing up to £7 billion.
There are also environmental factors at play, as demonstrated recently when a factory in Taiwan closed down due to a severe drought, as manufacturing chips requires a lot of water. Furthermore, widely predicted global water shortages could potentially cause even more chip shortages in the future.
It’s clear that the pandemic has demonstrated that the global supply chain of computer chips is extremely fragile and unable to respond quickly to fluctuations in demand. Chip manufacturers, facing a huge demand for their products, are raising their prices which in turn increases the cost of electronic items for consumers.
With component shortages predicted to carry on for months, and demand for IT solutions increasing, today’s businesses have been turning to a different solution.
We’ve outlined below how businesses and consumers alike can avoid getting caught out by the global chip shortage:
Choose refurbished over new
When faced with long delays for IT equipment, businesses are increasingly turning to the refurbished market. This was evidenced by our global team who reported that Techbuyer welcomed 85 per cent more customers between March and July 2020, plus welcomed back previous clients who then bought refurbished for the first time. Our team is immensely proud to have enabled businesses to keep operations efficiently running during lockdown.
Refurbished IT equipment performs identically to new when refurbished to a high quality and configured correctly and upgraded machines can even outperform basic configurations of new machines. What’s more, with the right upgrades, our latest research, published as a peer-reviewed article by IEEE, uncovered that refurbished hardware can outperform new devices.
When you order from a quality refurbishment specialist, you can have complete piece of mind thanks to extensive warranties and rigorous testing procedures which are equal to, or even top those of the OEMs. You might be surprised to learn that at Techbuyer, we provide a three-year warranty with every product, and all products go through our 25-point recertification process in our secure facilities.
Upgrading rather than overhauling
To maintain IT hardware and minimise budgetary spend, businesses are taking a closer look at the devices they already have and examining which devices need to be replaced, and which can simply be upgraded.
For example, a business that is struggling to get hold of new desktops due to chip shortages, should consider that CPU, HDD, SSD and RAM upgrades are ideal for maintaining this equipment and boosting performance. With no end in sight for the present chip shortage crisis, businesses looking for an affordable and easy way to extend the lifecycle of their desktops or laptops should check out our refresh service.
Optimise your server estates
Major suppliers of servers, such as Intel and AMD, are warning customers of massively increased lead times for ordering new servers. This is because the components crucial in producing a CPU are all in short supply, such as resistors, capacitors, and circuit boards.
There’s little confidence in when supply chain pressure might ease, as manufacturing facilities can’t exactly be expanded overnight, and the demand for compute is ever growing. Businesses that are looking to buy new servers and are suddenly unable to do so, are facing the real risk of service interruptions and reduced infrastructure.
To mitigate this risk, many businesses are turning to refurbishment specialists, such as Techbuyer for cost-effective, optimised server estates. Interact, Techbuyer’s sister company, offer an efficiency management software that provides a non-intrusive measurement of how well a fully configured server is performing. This in turn offers recommendations to help businesses improve server efficiency and reduce their energy consumption.
Interact was developed from Techbuyer and the University of East London’s Innovate UK Knowledge Transfer Project [KTP], which combined leading edge machine learning with thousands of hours of hardware benchmarking and decades of experience and in-house knowledge.
Becoming a Sustainable Business
Techbuyer is a global provider of sustainable IT solutions. It won Sustainable Organisation of the Year at the UK IT Industry Awards in 2021 and Circular Economy Organisation of the Year at the IEMA awards 2020.
In Episode Two of our podcast series, created in collaboration with the Leaders Council, our Sustainability Lead and Chartered Environmentalist, Astrid Wynne, talks about what it is to be a sustainable business.
Listen to the full podcast below. Click here to learn more about our new podcast series.
Photo by Johannes Plenio on Unsplash
