The world runs on microchips. Not just the elaborate ones at the heart of your phone or laptop but mostly a lot of ordinary ones that you aren't even aware of. They enable the power windows in your car and the timer in your coffee maker. But a chip shortage is putting a crimp in the production of all kinds of products, from dog washing booths to pickup trucks. Now what?
Microchips seldom work alone: The most powerful ones are useless without more pedestrian support chips that can hobble the manufacturing of a product.
Scott Stein/CNET"A year ago people stopped buying just about anything" except home technology, notes CNET senior reporter Shara Tibken. "Now demand is coming back. What we're seeing is just about everything electronic is having trouble getting a supply" of chips. The chip industry's fabrication plants or "fabs" aren't well-suited to whipsawing demand.
"These are gargantuan battleships. They're not factories you take offline and back online on a whim," says CNET senior reporter Stephen Shankland. Intel, Taiwan Semiconductor Manufacturing Company and Samsung are regarded as the big three -- but an array of lesser-known chip companies can hold up the production of products even if Intel or TSMC chips are available.
"It's just some little support chip made in some older fab," says Shankland. "Those shortages have been enough to trip up much bigger, much more powerful products."
A large backlog of nearly completed Ford F-150 pickup trucks has piled up in marshaling yards as the vehicles await chip-based modules that are "tied to basic vehicle functions, such as windshield wiper motors and infotainment features," Ford spokesperson Kelli Felker told Automotive News. And even if a consumer electronic product like a TV is available, its price may soar as the chip shortage increases manufacturing costs.
Production recovery in the chip industry may be almost as complicated as its products. "High-end processors might be fine by the end of this year," says Tibken. "In some other areas it could stretch well into next year. But I haven't heard anyone say [it stretches] into 2023."
Tibken and Shankland have many more insights into the complicated pipeline headaches in the chip industry. It's a fascinating conversation you can see in the video above.
Now What is a video interview series with industry leaders, celebrities and influencers that covers trends impacting businesses and consumers amid the "new normal." There will always be change in our world, and we'll be here to discuss how to navigate it all.
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What's really behind the chip shortage and when will it end? - CNET
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