Electronic component shortages, specifically semiconductors and substrates for central processing units (CPUs), have created a massive problem for many industries, including the gaming industry, leaving consumers in limbo as they are unable to get their hands-on new gaming hardware.
Gaming hardware manufacturers have struggled with stock shortages for a year now. However, consumers are facing price hikes and shortages of products from TVs and mobile phones to cars as the global shortage in semiconductors grows.
Firstly, what exactly is a semiconductor?
A computer chip also called a semiconductor or integrated circuit, is a series of electronic circuits printed onto a conducting material, usually silicon. They form the physical building blocks used to make computers and run the software. Following years of innovation, chip manufacturers have been able to reduce the size while fitting more circuits in, leading to faster computing speeds and lower prices. However, the size and design have also contributed to the current global shortage we are experiencing today.
There are dozens in every car, helping regulate engine temperatures and stabilize suspension systems. They manage water treatment plants, power lines and Internet cables. Almost any product that plugs into a wall now carries a tiny computer inside.
More efficient or power-saving designs are also becoming a critical consideration given the so-called internet of things — a universe of smart or connected devices from the beefiest phones to the most common light switches and refrigerators — is expected to swell usage of chips exponentially in coming years.
One way to measure the sophistication of a chip is so-called linewidths or the distance between circuits. The current standard in advanced chips is 5 nanometres, or billionths of a meter, about a hundred-thousandth of the width of a strand of hair.
What is causing the shortage
The current chip shortage is the result of a perfect storm of factors, including pandemic-related work stoppages, increased demand, and disruptions within transportation logistics. Even while manufacturing declined, demand has boomed.
The stay-at-home era caused by the COVID-19 pandemic has pushed demand beyond levels projected by chipmakers. Lockdowns spurred growth in sales of laptops to its highest in a decade. Home-networking devices, webcams and monitors were bought as office work moved out of the office.
At the same time, millions of people forced to work or learn from home poured money they may have otherwise spent on movie tickets or vacations into TVs, computers and video game systems. Electronics companies bought up all extra chips to meet that demand, and when auto companies realized people still wanted cars it was too late.
Most modern chipmakers also use ABF, otherwise known as “Ajinomoto Build-up Film” to design the smaller components of their CPUs and GPUs. The shortage of ABF substrates has become one of the major factors behind CPU and GPU shortages we are currently experiencing.
The demand from corporations
The shortage of these chips, which are essentially the brain within every electronic device has been steadily worsening since last year. Although production is back to normal, a new surge in demand driven by changing habits fuelled by the pandemic means that it is now reaching a crisis point. Car manufacturers investing in tech-heavy electric vehicles, the boom in sales of TVs and home computers and launch of new games consoles and 5G-enabled mobile phones have all driven demand.
Auto manufacturer Ford had cancelled shifts at two car plants and said profits could be hit by up to $2.5bn this year due to chip shortages, while Nissan also had to reduce output at plants in Mexico and the US. The Apple corporation, a $2 trillion company and the world’s biggest buyer of semiconductors spending $58bn annually, was forced to delay the launch of the much-hyped iPhone 12 by two months last year due to the shortage.
The impact on the gaming industry
This ultimately affects the consumer as prices will go up for all sorts of electrical products. Some high-end computer and gaming components are selling on auction sites such as eBay for double their retail prices and wait times for new PlayStations and Xboxes may get pushed out further.
Although it’s not hard to find a good desktop or laptop computer for everyday work, finding gaming PC equipment and game consoles have become more difficult and more expensive in the past few months. Most gaming PCs depend upon Nvidia or AMD graphic processors. With both corporations launching their new line of processors, consumers have been left disappointed by how impossible they are to find.
It’s been a drawn-out battle on the hardware front over the past year, with even top companies like AMD and Nvidia being unable to meet the exponential rise in consumer demand during the pandemic.
Likewise, both Sony and Microsoft are using AMD chips in the new PlayStation 5 and Xbox Series X and S consoles, respectively, putting extra strain on the supply chain and making these already-hard-to-get new consoles even more challenging to find.
As 5G mobile networks proliferate and push up demand for data-heavy video and game streaming and more people work from home, the need for newer, more power-efficient silicon is only going to grow.
The semiconductor fabrication industry is going to bounce back, but it is unclear how long it will take for the supply shortage to lift. For the consumers, however, this means the best thing to do is to be patient and wait for the light at the end of the tunnel.
- Matthew Hall is Product Director at Rectron