We have faced a shortage of chips and semiconductors for the past few years. With both being crucial in the production of consumer electronics, the lack of semiconductors has meant devastating consequences for manufacturers, forcing many to cut production, leading to companies issuing profit warnings.

Numerous factors have contributed, in varying degrees, to the shortage.

  A proportion of the issue is owing to the COVID-19 Pandemic. There are two sides to the pandemic being a contributor: firstly, the effect of lockdowns on manufacturing & distribution and, secondly, changes in consumer purchasing habits.

Looking firstly at the effect country-wide lockdowns had on manufacturing and production, factories had to close, meaning production stopped, and suppliers of electronic components couldn't keep up with demand.

Secondly, changes in consumer purchasing habits; when lockdown hit and people were spending all their time at home, the sales of games consoles and other electronic devices were unprecedented. There was also an increase in the number of people working from home, and this, coupled with homeschooling, saw an increase in the purchase of home PCs and laptops.

  The simple matter of supply outstripping demand is a significant factor in the chip shortage saga. As the world continues to rely on technology, which will only increase over time, more components are needed to keep up. The automotive industry is most certainly experiencing supply issues. Cars are becoming increasingly technologically advanced with improved in-vehicle features, and with this comes a need for more semiconductors.

  During the last few years, a series of isolated events have caused delays or interruptions to production, contributing to the chip shortage. Factory fires, extreme weather conditions, shipping bottlenecks, canal blockages, and a lack of shipping containers to name a few. While all these incidents were temporary inconveniences, they compounded an already challenged industry.

With the above in mind, companies must be proactive when purchasing their components. Considering the availability of components during the design phase is crucial as this will save a lot of time and potential redesign of products should the required components not be available. Companies should also be aware of alternative components they could use should there be a supply issue at the point of production. Placing future orders or making bulk purchases for parts they know will be required is another way for companies to be proactive and ensure they receive their allocation quickly.

This shortage will end at some point; however, it is currently impossible to know when. Some industries are already feeling some relief and are seeing improvements in the supply of components, while others continue to struggle. Reports suggest that the shortage is easing; supply is starting to improve, and there is little reason to believe this will change.

At Tencell, we liaise with you at every step to ensure timely component sourcing. We provide regular updates on order status through consistent communication, ensuring smooth production without any unexpected surprises. Contact sales@tencell.com to discuss your project with us.