The short term impact because of chip shortage can be seen by those who tried buying through plugs or batteries. But have you imagined what will be the long-term impact on IT executives?
In the storm of demand and supply issue, the lightning of the Covid-19 pandemic led the product forecast backwards, reducing and redirecting production of the chipmakers. In recent years the booming demand for the chips caught the makers off-guard and buyers and makers scrambling.
REASONS FOR THE SHORTAGE:
• Explaining further, the shortage is the essential demand-supply chain, only with a unique touch. With the pandemic on board, many industries held back the chip orders. But the rise in remote work and learning led to skyrocketing demand for chips. When chipmakers saw the consumer’s need, they were shocked as they never expected such high demand.
• One more reason behind the chip supply shortage was the Trade War with China. As many chipmakers were American Companies and were against buying hardware products from China, the latter stockpiled the chips leading to the imbalance.
AFFECTS OF THE SHORTAGE:
The list of products affected by this shortage is broad. There were pictures over the internet showing rows after rows of shiny pickup trucks waiting to be loaded.
The automakers are also hit hard, adding to the limited stocks of intelligent appliances, games, and toys for at least a couple of years.
If you are a Chief Information Officer or Chief Technology Officer, should you consider making a new IT initiative roadmap?
Many technology leaders thought that the chip supply shortage would be resolved eventually after a few months. But as they started buying the technology to ramp up digital efforts in the pandemic, the actual picture became more apparent.
There were CIOs who got stuck as they couldn’t source the specific PC configuration. Either they had to buy different formats or shift to a new vendor, causing complications in the IT strategies.
But what’s the antidote to these shortages and complications?
• The first, to keep a practical approach for computing capacity challenges. Shifting the capacities to the cloud is a primary option for many organizations. It is basically like kicking a can down the road and letting the cloud provider worry about the semiconductor shortage.
• Second, to buy refurbished equipment- or put off the schedule hardware refresh as long as possible.
To address the more prolonged impact, it is necessary to increase the supplanting capacity of Asian production along with the US and Europe. Till then, we are stuck with limited chips and factories making it.