While a new generation of consoles has recently hit the market, interest in VR has soared, more people have begun mining cryptocurrencies and more products than ever are being produced with computer chips in them, the supply lines for producing computing parts has taken a large hit resulting in the GPU and CPU shortage you are likely to have already heard a lot about.
Having lasted over a year, the global chip shortage has impact industries across the board from car manufacturers to game makers and, most presently, it may have affected you in upgrading your PC. Let's dive into what the causes of the shortage have been, and whether there is any resolution in sight.
Why is There a Shortage?
The most obvious answer is the one we've already mentioned: coronavirus. Most industries have taken a large hit from the global pandemic over the last year, and computer manufacturers have certainly taken a big one resulting in a notable reduction in production. But to limit our explanation to this most obvious cause would be missing the point.
Along with decreased production, there has been an incredibly high demand for new hardware. Through the release of the recent Xbox Series X and PS5, its fair to say that GPU manufacturers were already stretched to meet the demands of a hotly anticipated next generation of console. Beyond gaming, cryptocurrency mining has also seen a sharp increase, with many miners taking advantage of powerful graphics cards to ramp up performance and provide better gains. On top of this, increasing demands from auto manufacturers due to the widespread adoption of on-board computers in modern vehicles adds another chunk to the pile.
But that isn't all. The environment, or more to the point climate change, has contributed to one of the worst droughts in Taiwan in decades. Why is this important you ask? Taiwan is home to two-thirds of the world's semiconductor manufacturing capacity, meaning that 65% of all semiconductors used globally come from the small island. In order to make semiconductors, businesses need large water supplies. Due to the drought reservoirs such as the Baoshan No. 2 Reservoir in Hsinchu County, which is one of the key reservoirs for the country's semiconductor industry, is hovering at around 7% capacity.
All this has resulted in semiconductor companies shipping 10 to 30% fewer semiconductors than are in demand for months on end, resulting in a large wait time of at least 14 weeks, which means that it may well take a few quarters before supply can once again meet with demand.
Is There Any Resolution in Sight?
Recently, TSMC, one of the worlds single largest producers of semiconductors based in Taiwan, provided news to their automaker clients suggesting that chip supply could ramp up in the next quarter thanks to their commitment to ramping up production in its factories in the coming years. But how will this trickle down to us-those who just want a new CPU or GPU?
Regarding CPUs, we may be in luck. Intel recently launched its 11th generation Rocket Lake desktop CPUs-so the market is showing some signs of powering through the storm despite the shortage. While there has been comparatively little word from AMD, it's clear that consumers may be able to lean back on Intel, despite the bad wrap they've been getting regarding their CPUs in the last few years.
GPUs on the other hand unfortunately look like they may take a much longer time to come back to shelves. As demand remains through the roof and the semiconductor drought continues in full force, there's no telling how long it will be until the likes of Nvidia can offer up fresh GPUs.
In interview, Nvidia's chief financial officer has mentioned directly that Nvidia's "overall capacity has not been able to keep up".
When Can We Expect New Chips?
There's no easy answer to this question. As we head into summer and Taiwan's drought shows little sign of letting up, the lack of semiconductors is likely to last for a while longer. TSMC have even warned that the chip shortage could last through to at least 2022 if nothing changes.
Thus, while there may be some hope on the horizon in the short term for Intel fans and auto-production, there's no telling how long this drought will currently go on for.
While much of the CPU/GPU shortage has been the result of COVID-19, there's no denying the almighty affect that climate change has had on it-and, if seen in that light, it is fair to assume that there is only more to come in the coming decades. But perhaps this can act as another wakeup call for even the most tech-focused enthusiast, that there's no denying the manmade changes to our climate will impact every facet of our lives-even if that is through causing a drought on the other side of the globe.
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