Computer chips are everywhere. There are dozens in every car, they manage water treatment plants, power lines and internet cables. Almost any product that plugs into a wall now carries a tiny computer inside. Even the access cards and credit cards in your wallet contain chips. The modern world runs on them. And now there’s not enough of them.
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 software. Over the years, chip designers have managed to squeeze more and more circuits into smaller spaces, making computers exponentially faster and cheaper. But the tiny size and complex design laid the groundwork for the current shortage.
Why don’t the chip companies just make more?
Unlike car engines or toys, chips need to be built in factories with highly controlled environments. Specks of dust, temperature spikes and even static electricity can damage the intricate workings of semiconductors. Meeting unexpected demand isn’t as simple as setting up another production line and hiring a few more workers. New chip fabs cost billions of dollars and can take two years to build. Right now, fabs are running at full capacity, but it will take months or years before new ones come online to fill the extra demand.
What role does the pandemic play in the shortage?
When the pandemic started shutting down parts of the global economy last year, most economists thought consumer spending would drop off a cliff as people lost their jobs or stopped buying nonessential goods. Auto companies cut back on production and ordered fewer of the chips needed to make their cars run. 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.
For you and us
This shortage has an equally large impact for card manufacturers and other players in the identification sector. The chips present in access badges and credit cards come from the same manufacturers as those in cars and computers. Because manufacturers are running at full capacity and there are still shortages, they focus on the automotive and electronics sectors. As a result, card manufacturers, including us, threaten to have long-term stock problems. Of course we guarantee you there is enough stock for the coming months to meet the demand, but we still want to ask all customers to check how much longer their stock of chip cards lasts. This way we can make arrangements with our suppliers, do adequate stock management and we don't have to disappoint anyone.