Microchip shortage: From phones to cars, everything's about to cost more
Microchips have revolutionised our world and now they're in short supply.
It's affecting manufacturers of just about everything, from car makers to tech companies.
On The Money Show, Arthur Goldstuck (MD of World Wide Worx) explains why the supply chain for chip manufacturers is constrained globally at the moment.
The term 'supply chain' has suddenly become a common phrase for people who always thought that was just where you got your your latest fix. Now it's going to become your digital fix that you need from the supply chain!Arthur Goldstuck, MD - World Wide Worx
No-one expected the massive demand for computers during 2020 as everyone began to work from home... or at least information workers...Arthur Goldstuck, MD - World Wide Worx
They also didn't count on the fact that cutting down on production in the early stages of the pandemic - because of people not being able to work in factories - would have such a long-term knock-on effect.Arthur Goldstuck, MD - World Wide Worx
Goldstuck points out that in today's world every major appliance uses microchips.
In your kitchen, for example, this would include everything from a washing machine and oven down to a toaster.
This means that if you want to buy a new model of almost any one of these major appliances, you're going to be on a waiting list! The demand is going to be a little bit like we've seen for the PlayStation 5 where they simply cannot keep up... and as they bring a new supply to market it sells out instantly...Arthur Goldstuck, MD - World Wide Worx
Sony were in fact one of the great beneficiaries of the demand for home entertainment, but also one of the great victims for not looking after their supply chain at the beginning of the pandemic. They postponed their orders for chips, apparently... and when they realised the demand was going to be huge and they tried to get back in line, they couldn't.Arthur Goldstuck, MD - World Wide Worx
The shortage of supply across the board is going to result in higher prices, he predicts.
The result is massive constraints in supplying PlayStations to a very ready market and we're going to see that across all sectors.Arthur Goldstuck, MD - World Wide Worx
It's the same with Apple's iPhones which have also been constrained by the shortage of chips. The mobile phone sector will be the most heavily affected, but it's expected that revenues from mobile chips are going to grow something like 23% this year.Arthur Goldstuck, MD - World Wide Worx
Listen to the interview with Goldstuck below:
Source : https://cdn.pixabay.com/photo/2020/03/12/07/27/microchips-4924170960720.jpg