All major industries, including consumer electronics, have performed well during the last two years. Because of the COVID lockdowns, the demand for portable devices increased, and manufacturers struggled to cater to the demand. This put a lot of pressure on equipment manufacturers, particularly the chip sector, which serves as the backbone for all significant modern electronics.
Both TSMC and Intel are reporting chip shortages for chipmaking equipment, even as the effects of the pandemic appear to have worn off. Most of these chip manufacturing equipment is highly complicated, costs a fortune to build, and takes months to construct. So purchasing them was not an easy process prior to the pandemic, with most of the preparation required, and it would be during or after the pandemic since lead times had increased to 2 to 3 years.
Notably, the most serious problem is not with CPUs and GPUs, but with far more basic devices such as display drivers and power management systems. These low-tech processors are found in a wide range of products, including those manufactured by Apple. The latest estimates released by Apple‘s CEO pointed out a loss of $6 billion and this number could go up to $8 billion if things don’t normalise soon.
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While many individuals in the chipmaking industry have predicted that the market will find respite by the end of this year, there is a chance that things could return to normal by 2024. Both Intel and TSMC advocate the method of providing priority to clients who create chips for other chip manufacturing machines, with the intention of generating more chip-making machines as quickly as possible to overcome this scarcity.