What to Know About the Supply Chain and Tech

What’s the Issue? 

This summer’s recent chip shortage has affected nearly all manufacturers. The supply of semiconductors was disrupted due to Covid-19 related lockdowns, while simultaneously the demand for laptops and gaming consoles increased as people worked (and played) from home.  

The shortage has impacted everything from auto production to consumer tech -- from Ford trucks to laptops and smartphones.  

How Did it Happen? 

Semiconductor microchips are used in almost all electronic devices that we use on a daily basis, including computers, tablets, appliances, and cars. They take up to six months to make. The demand for these chips has always been high, but adverse events and increased demand have caused the recent shortage. 

Due to Covid-19, car factories stopped production, sensing the economic stall. They canceled their orders for semiconductors. As people began working from home, there was also a surge of computer and electronics purchases. Now that demand for semiconductors is high again, vendors can’t supply enough chips to the wide variety of industries that require them. The increased demand combined with the low chip inventory created a shortage for companies like Dell, Apple, and Samsung. 

How does this affect us in Middle Tennessee? 

The only solution to the chip shortage may be time. Experts have estimated that the shortage will last until the end of 2021. It is important to keep in mind that delays in shipping and production of PCs, laptops, and hardware is to be expected.  Hardware is still being produced, but it is being shipped at a much slower rate. Products may cost more, as the supply is low and demand is high.  

Keep in mind that inventory for common hardware, like desktops and laptops, is low. If you are hiring within your company or doing big PC orders, order ahead to prepare for the possible delay in delivery. And remember, because of limited supply and increased demand, the price for hardware is high. 

The ideal situation, in any case, but especially now, is to plan ahead for hardware purchases.   Managing hardware inventory is essential to being strategic when new equipment should be procured.  This should be on every company’s IT Roadmap.