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When the chips are down

by Michael Lester

Posted on at 08:54am

What does a microchip have in common with COVID-19?

No, this isn’t some conspiracy theory post, the truth is that one has disproportionately affected the other.

If you go back to the start of the pandemic, you will rightly remember the shelves stripped bare of essentials (particularly toilet paper), but did you find yourself needing a monitor, or a laptop, or keyboard as you were forced to work from home?  Turns out an awful lot of people did, and as a result the manufacturers for these chips have found themselves with unprecedented demand.

Unfortunately, the number of plants that can actually make the chips we take for granted in much of our personal technology is actually fairly limited as the process for making these is remarkably complex. Add to this, they’ve had lockdowns, natural disasters (Taiwan is currently going through a drought), man-made disasters (factory fires), and the situation is fairly grim.

So… what does this mean for you?

Lead times on technology products are increasing… and they’re going to continue to increase for the foreseeable future. Products that we used to rely on arriving in 6 weeks, are now taking 12 weeks. We’ve heard of some manufacturers setting expectations of 6 month lead times, on certain technology. 

If you have upcoming technology purchases, particularly those that are time-critical – you need to ensure you allow plenty of time for these products to ship.  If you need something for the end of year, consider ordering before September. If you have a decision to make that involves extending your warranty, or replacing – consider that you may need to do both, to protect your organisation.

The good news is, the impact of this chip shortage has been felt, acknowledged, and we’re now seeing countries demand sovereign manufacturing capability. Factories are being built in China, and the USA which will hopefully diversify supply-lines in the future.  Unfortunately this is going to take some time, so for the foreseeable future, make sure you plan your purchases well in advance of when you need them.