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  • It’s pretty hard to imagine a world without microchips.

  • Theyre not just in tech like your phone and computer, but in pretty much every electronic

  • youll encounter today: refrigerators, washing machines, strings of LED lights, electric

  • toothbrushes, cars, and so much more.

  • They used to be so easy to get they cost only about a dollar each, but right now theyre

  • going for as much as 150 bucks a pop because there’s a huge shortage,

  • a shortage that isn’t entirely

  • due to the COVID-19 pandemic.

  • So why are these microchips so useful, and so in-demand?

  • Well, theyre Moore’s Law made realtens of billions of transistors packed into a space

  • about as big as your pinky fingernail.

  • A transistor is essentially a tiny electrical switch that lets electrons flow when open

  • or stops them when closed.

  • These transistors are layered over and around one another on a wafer of silicon to

  • create a network that functions together as a circuit.

  • The pattern of electrons flowing through these gates, plus sensors and other stuff, allow

  • you to communicate with the device.

  • But these chips are getting smaller and smaller, packed with more and more processing power.

  • When were talking about ten of billions of transistors in the space of a few nanometers,

  • the manufacturing becomes hugely complicated and time-consuming.

  • Were talking cleanrooms with air 10,000 times more filtered than normal room air,

  • etching the transistors with super precise lasers.

  • So, a facility capable of producing chips like this costs tens of billions of dollars to

  • get up and running, soit's just a little tough.

  • And during the COVID-19 pandemic, many of those invaluable chip factories had to close,

  • along with the rest of the world.

  • But the demand for chips didn’t slow downin fact, it exploded as devices became our main

  • way of continuing to work, entertaining ourselves, and connecting with one another.

  • With this mismatch of supply and demandchips have become more precious.

  • But it’s not just the facilities that have been affectedthese chips (and the materials

  • used to make them) also have to be shipped all over the world.

  • As ports struggle with staff shortages and the bottleneck of goods caused by shutdowns,

  • getting things from one place to another takes a lot longer and is more expensive than it

  • used to be.

  • But the world’s chip shortage can’t only be blamed on the pandemicthis has been

  • brewing for a while.

  • Chip manufacturing is dominated by just a few companies in just a few countries.

  • TSMC, a Taiwanese chip manufacturer, makes 92% of the world’s most sophisticated chips,

  • 60% of the chips used in cars worldwide, and 30% of the simpler chips used in everyday

  • items.

  • Now, the US develops and sells the most chips overall,

  • but the vast majority of the world’s advanced chip manufacturing

  • happens either in Taiwan or South Korea.

  • Shortages have occurred in the past when these places have been hit by natural disasters.

  • So, it was a precarious infrastructure in the first place.

  • And the number of these manufacturing facilities hasn’t grown as fast as our digital landscape

  • has: with the launch of 5G technology, more demand for smarter devices, more use

  • of cloud computing, the move to electric cars... all of this added on to how expensive and difficult

  • chip factories are to build, and you have a perfect storm for shortage.

  • And then COVID-19 hit.

  • The impacts of all this are being felt across all kinds of industries.

  • Auto companies are rolling out millions less cars in 2022.

  • Some products from companies like Apple and Playstation are going to be delayed, and consumers

  • may see less variety on shelves, longer wait times between clicking order and the item

  • actually arriving, plus potentially larger price tags.

  • Now, if youre not in the market for this newer tech, youre still outta luck.

  • Older chip technology is actually the hardest to come by.

  • The industry has been so busy investing in the super complex and fancy chip manufacturing

  • that older manufacturing equipment has fallen by the wayside, making it harder to keep up

  • with demand for the chips that go in simpler devices.

  • It’s not just consumer tech that’s feeling the squeeze, either.

  • Some of the world’s premiere scientific institutions have also had to delay the launch of the most

  • powerful supercomputers to date because ofchip shortages.

  • And experts think it’s gonna be a while before the industry works through the backlog

  • of orders that’s piled uplike, things might be back to normal in chip world by early

  • 2023…but this is optimistic.

  • Some experts say it’s unrealistic to expect production to catch up to demand before 2030.

  • As countries feel the pinch theyre thinking more about investing in domestic chip production

  • so that outside forces don’t have as much impact on the market.

  • More factories in more countries with more capabilities are on their way, but like weve

  • said, the science and tech required is not quick’n’easy to implement so...

  • hence the 2030 prediction.

  • In the meantime, the factories that are able to produce them are slowly chipping away

  • at the orders that are still flooding in.

  • If you want more on Moore’s Law and computer chips, then check out this video here, and

  • keep coming back to Seeker for all your semiconductor news.

  • If you have another tech topic you want to see us cover, leave us a comment down below

  • and as always, don’t forget to subscribe and thanks for watching.

  • I’ll see ya next time.

It’s pretty hard to imagine a world without microchips.

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A1 chip manufacturing demand shortage tech world

Why the World's Microchip Crisis Will Last Longer Than You Think

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    Summer posted on 2021/11/08
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