The shortage of microchips in the world is a reality. Producers of such devices, such as South Korea and Taiwan, have already raised the alert. As a result of the pandemic, demand for these devices increased, generating a shortage that has interrupted production.
Microchips are made from semiconductors, which are essential for the creation of electronic devices: from video game consoles, computers, smartphones to automobiles. And being a building block in modern electronics, all industries have been – and will be – affected.
In addition to the pandemic, cryptocurrencies also influence scarcity. Specifically, the mining of these, because it requires many graphics cards to support the process. And in the face of the boom of this digital currency, there are millions of computers that are implementing algorithms to generate money, spending a lot of energy and consuming microchips.
Building a microchip is not easy. It takes more than three months to manufacture, in dust-free rooms, with million-dollar machines, lasers and molten tin. The problem, so far, is that in the face of mobility blockades and the closure of production factories, companies have not been able to meet delivery times.
A problem with cloud solution
Building a microchip factory is no easy task. In addition to a million-dollar investment, it takes between 14 and 24 months to open a plant after starting to build it. Currently, new factories are being created to be able to support the demand in the future, but they are long-term projects (3 to 4 years).
In simple terms, this shortage translates into longer lead times and ever higher prices. Every effort is being made to prevent the increase from being so great. Fortunately, this situation is not critical as it drives cloud-based solutions and digital means of payment.
Obviously, although it is not a solution in itself, it allows to mitigate the risk in the future. The shortage is likely to last over time. Then, there will be a greater migration to the cloud.
Also, given the shortage of physical devices such as POS, digital means of payment are also projected to experience a boost. Therefore, digital contactless payment solutions (QR, for example) will have to continue to be implemented to the merchant and the end user.
Prevailing negotiating powers
The cloud also needs microchips. Azure farms from Microsoft and other service providers, such as Amazon Web Services, use these devices. But the bargaining power of these companies thanks to their volume of purchase, allows them to ensure the stability of their services. Therefore, they should not be affected.
The most important thing at the moment is to consolidate sales projections and equipment needs to be able to go with an attractive volume to producers and, in this way, achieve a better delivery priority than we have today.
We must continue to promote solutions so that customers can solve and improve their business processes. But you have to be alert, adjust and try to anticipate to be prepared.
The content of this opinion column is the sole responsibility of its author, and does not necessarily reflect the editorial line or position of El Mostrador.
