There is a current global semiconductor shortage going on in the world, affecting the production of computers, smartphones, automobiles, washing machines, and anything which might contain a chip. But why is this shortage present? Let us discuss it in today's Blog.
The Semiconductor Market and Covid-19
The first and foremost reason for the global chip shortage can be given to Covid-19. When the pandemic hit the world, the whole globe went into lockdown, thus affecting everything! The factories shut down and production of semiconductors either stopped or was drastically affected, like everything else. But then, people started working from home. The demand for Personal Computers, Smartphones, and other gadgets skyrocketed!
The production started again but it failed to meet the exponentially increasing demand for semiconductors. This contributed a huge part to the current semiconductor shortage
Cryptocurrency Mining
Cryptocurrencies, especially Bitcoin, require huge amounts of energy to sustain themselves. This is because every Bitcoin transaction has to be verified multiple times before it is successful. It has to be verified by several people and whoever verifies the transaction first, gets a commission. This creates competition among people to verify the transactions first so that they can get the commission. For this, they purchase very high-powered computers with very high-power GPUs, which has also contributed significantly to a substantial rise in the prices of GPUs in the market.
Impact of global chip shortage
So what is the impact of this chip shortage? Well, for starters, the price of anything which contains a semiconductor inside it has gone up, especially the GPU prices. Also, the Automobile industry is the worst hit by the shortage. This is because a single automobile uses much more chips as compared to a PC or a smartphone. There is currently an average delay of 4 to 6 months in the production of a car from the date of its order. This is a very grave situation and demands our attention urgently and needs to be resolved immediately. But how long will it take for the shortage to end? Well, according to some experts, the chip shortage can extend till 2023, if the demand and supply rates remain the same as now!
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