If you are an avid consumer of electronics, or had tried purchasing a high-end graphics card in recent times, then you would have been startled by the lack of availability or, if they are in stock, the astronomical price tag. To make matters worse we have seen the demand for such products grow exponentially since the pandemic began and staying home (and passing the time playing games) became more common.
The bad news is that TSCM, a hardware manufacturer for Apple, AMD, Qualcomm, and other companies, has signaled that things won't get better until 2022. Intel and Nvidia have given similar predictions.
The good news is... well, there isn't good news, just hopeful news. Although there is a shortage for PS5 and Xbox Series X consoles, and RTX 3000 cards, with determination and a little luck, you can find the hardware at the time of its restocking. That is, if scalpers don't beat you to it.
How Did the Shortage Begin?
The extremely high demand for computer chips combined with several external factors, such as the increasing scarcity of quality raw materials, the trade war between the US and China, and especially the COVID-19 pandemic, are some of the reasons for the high price and limited stocks of video cards and next-generation consoles. Several other industries, such as the automotive industry, are also affected.
With many people spending more time at home, the demand for laptops, smartphones, tablets, and TVs, for example, increased considerably in 2020.
In addition, the automotive industry, which had shut down assembly lines in many parts of the world in the first months of the pandemic, has seen a resumption of production with demand well above expectations.
You can also notice many blaming crypto miners for buying GPUs and hoarding them in bulk, and while they have a small share of the blame, they are hardly responsible for the global shortage. Even washing machines are suffering from the drought, and so far, I have never heard of crypto coin laundering.
Chip Shortage Could Last Into 2023
In a Bloomberg report, TSMC Chief Executive Officer C. C. Wei claimed:
We see the demand continue to be high. In 2023, I hope we can offer more capacity to support our customers. At that time, we'll start to see the supply chain tightness release a little bit.
TSMC also claims that its plants are already producing above their maximum design capacities. In the medium term, the plan is that they will implement solutions to increase this output. However, Wei's comment supports the predictions of Pat Gelsinger, Intel's CEO, when he was questioned whether he could help the shortage issue.
We do believe we have the ability to help. I think this is a couple of years until you are totally able to address it. It just takes a couple of years [for the supply-chain] to build capacity.
Even if US President Joe Biden supports ending the chip shortage - probably because of carmakers and not because he wants to play video games with his granddaughter again - analyzing the automobile industry may be a good gauge in order to understand how our game industry will react.
Although TSMC has announced a $100 billion investment to build more factories, this is a long-term plan due to complete in three years. Intel also plans to invest a smaller amount, $20 billion, to build two factories in the United States to manufacture custom chips.
If you constantly study and research retailers but only find abusive prices way above MSRP, I feel you. I will probably be late to play Final Fantasy VII Intergrade and won't reduce my loading from 25 seconds to 2 seconds in Final Fantasy XIV any time soon. But all we can do now is wait until the pandemic is over, so we can all embrace each other again and consequently normalize the production of GPUs. A consequence of the pandemic ending and not the hugging. Although I like hugs.